Turkey - Agriculture sector hit by dry weather
Turkey - Agriculture sector hit by dry weatherWidespread drought is affecting Turkey’s agriculture sector, with the 2014 wheat harvest at particular risk of underperforming and warnings of crop failures in a number of grain-growing regions. One of Europe’s largest wheat producers, Turkey harvested a record 22.1m tonnes in 2013. While much of this is for domestic consumption, Turkey exports to a number of countries both in the region and further afield, including to markets in Asia, with the Philippines and Indonesia among its major buyers.Widespread drought is affecting Turkey’s agriculture sector, with the 2014 wheat harvest at particular risk of underperforming and warnings of crop failures in a number of grain-growing regions. One of Europe’s largest wheat producers, Turkey harvested a record 22.1m tonnes in 2013, according to state statistics agency Turkstat. While much of this is for domestic consumption, Turkey exports to a number of countries both in the region and further afield, including to markets in Asia, with the Philippines and Indonesia among its major buyers. Turkey is an importer of some varieties of wheat, in particular durum wheat used for producing pasta. Last year, Turkey turned to Australia, one of the world’s leading wheat growers, after a lapse of almost 10 years, buying more than 50,000 tonnes of grain for domestic use. The wider agriculture sector represents the second-largest source of employment in the Turkish economy, providing jobs for around 25% of the workforce, behind only the services sector, with just under 50%. Drought drying up harvest hopes Poor rainfall this year may see exports down, imports up and employment levels put under pressure. The majority of Turkey’s wheat crop is planted in early to mid-winter, germinating before the coldest part of the season, then lying dormant until early spring before resuming its growing cycle, with harvests in June or early July. Given the timing of the planting, it is more dependent than most other crops on winter rains and snowfall to provide water for initial growth and then on further rains in spring to sustain growth. According to data released by the State Waterworks Authority, in the last three months of 2013, rainfall across the country was 31.4% down on average, and almost 42% below the figure for the preceding year. If the spring rains follow a similar pattern to that of winter, Turkey will face problems of water shortages both in its cities and in the agriculture sector. As of mid-January, the average water storage rate in the country’s dams was just over 35%, well down on the 64% for the same month in 2013. The shortage of water in some parts of the country is becoming acute. Yavuz Tezcan, the head of the Ceyhan Chamber of Agriculture in the southern province of Adana, recently warned that up to half the expected harvest of 2m tonnes in the Çukurova region, which accounts for some 10% of Turkey’s wheat production, could be lost if there are no significant rainfalls in February. Tezcan added that the province of Konya, traditionally the centre of the country’s wheat belt, has also been affected by drought. Potentially high costs for the economy Even if spring does bring significant rainfall, it may be too late for some drought-affected regions where the seed grain has failed to sprout due to dry conditions in early winter. Turkey can increase its grain imports to cover any shortfall, but putting bread on the table will come at a price. Over the past year the value of the lira has dropped by around 25% against the dollar, the main currency for international grain sales, while the expected poor harvest will mean Turkey will not be able to rely on exports to offset these costs. This would not only exacerbate Turkey’s trade imbalance – it could also contribute to inflation. The higher tariffs for grain may be passed on to consumers by the government, which sets tariffs for bread and buying rates for wheat from producers, in turn pushing up prices. Source - http://www.oxfordbusinessgroup.com/