Türkiye on Friday announced it would halt wheat imports from June 21 until at least mid-October to safeguard farmers from price fluctuations, secure domestic procurement of raw materials and create a favorable market for producers.
U.S. and European wheat futures dropped sharply on the news, both falling around 2%, with traders fearing Russian exporters would be struck by the move, compelling supplies earmarked for Türkiye to be sold cheaply in other markets.
Türkiye is the world's fifth largest wheat importer, buying mainly from Russia.
In a statement, Türkiye's Agriculture and Forestry Ministry said it would halt imports of wheat until at least Oct. 15 in accordance with foreign trade measures recommended by the Trade Ministry to protect producers, and added other measures would also be taken.
The measures would be implemented to "prevent our producers from being affected by price decreases due to supply density during the harvest period, to meet the raw material supply required for our exports from domestic production, and to ensure market stability in favor of producers," it said.
European grain traders feared the import ban would take hold just as Russia's new harvest this summer was set to enter world markets.
"Russia is likely to be the main loser on this," a German grain trader said. "Russia supplies somewhere between 60%-75% of Türkiye's wheat imports and this ban looks like it is coming into force just as Russia’s new crop needs to be marketed."
"If Russian wheat cannot be sold in Türkiye, it will have to be offered elsewhere at low prices, which could mean other importers in the Middle East, Africa and Asia will benefit."
But this could also cut importer demand for European and U.S. wheat, traders said.
Ban could be extended
Shortly after the announcement, Russia's Agriculture Ministry said it does not believe that Türkiye's temporary ban will adversely affect the country.
Agriculture Minister Oksana Lut said Russian exporters were already considering how to send production volumes to other destinations, Interfax news agency reported.
On Thursday, the ministry said the Turkish Grain Board (TMO) had set 2024 crop grain purchase prices for durum wheat, milling wheat and barley.
The import halt could be extended beyond Oct. 15 depending on "market conditions on that date," the ministry added.
It also said the exports of flour from domestically-produced wheat, banned since September 2018, would be allowed and added barley, milling and durum wheat exports can now be done using a TMO export license in a "controlled" way.
Türkiye is expected to import 12 million metric tons of grain in the 2024/25 season, including 8.5 million tons of wheat, according to figures from the International Grains Council.
Wheat slides further
Meanwhile, Chicago and Paris wheat futures extended losses on Friday to one-month lows as news from Türkiye weakened the demand outlook and eclipsed concerns over weather damage to crops in Russia.
Corn and soybean futures edged lower after rebounding in the previous session when news of tighter rules on tax credits in Brazil led to hopes that U.S. exports could benefit.
The most-active wheat contract on the Chicago Board of Trade (CBOT) was down 2.1% at $6.26-1/4 a bushel by 9:53 a.m. GMT, on track for its eighth consecutive daily fall.
It earlier touched its lowest level since May 6 at $6.25-1/2, nearly $1 below last week's 10-month peak of $7.20.
On Euronext, September wheat (BL2U4) plunged 4.1% in early trade to 241.00 euros per metric ton, its weakest since May 8.
"This is clearly going to take a major importer out of the market during the first part of the marketing season," a European trader said of Türkiye’s decision.
Türkiye is a key destination for Black Sea wheat, notably Russian wheat, and the absence of Turkish demand could stiffen competition in other export markets.
The demand setback further shifted attention away from weather risks in Russia, where analysts have slashed harvest forecasts in the past month due to frosts and drought.
A statement by Russian Deputy Agriculture Minister Andrei Razin that Moscow would fulfill all of its export commitments also eased concerns about possible Russian export restrictions in response to weather damage.
In other crops, CBOT soybeans fell 0.6% to $11.92-1/2 a bushel, while corn was 0.4% lower at $4.50 a bushel.
Favorable crop conditions in the U.S., where farmers have made steady progress in planting corn and soybeans while starting winter wheat harvesting, were also curbing grain prices.