Ülkü Karakuş, President of Turkish Feed Manufacturers' Association (TÜRKİYEM-BİR), conveyed his opinions about the effects of the ongoing war between Ukraine and Russia and the economic conditions in Turkey and around the world with a focus on feed prices. Pointing out that there are significant problems in feed ingredients prices and supply due to the war started by Russia in the live broadcast he participated on 17 March, TÜRKİYEM-BİR President Karakuş said that feed prices increased due to the recent developments both at home and abroad. Ülkü Karakuş stated that it is not right to try to curb prices with interventionist measures and this would be a wrong step that would repel the producers.

EXPERTS WERE WRONG IN UKRAINE, SIZE OF CRISIS EXCEEDED WHAT THEY ALL FORESAW

Analyzing the effect of the Russia-Ukraine war on raw material prices, Turkish Feed Manufacturers' Association (TÜRKİYEM-BİR) President Ülkü Karakuş said that the situation in Turkey is incomparably more effective than in other countries. “Our two most important partners in raw material trade are fighting against each other,” commented President Ülkü Karakuş, about the ongoing war. Reminding that most of the political analyses made when the war was about to break out, Karakuş stressed that the markets have been caught largely unprepared for the war initiated by Russia.

HALF OF FOREIGN TRADE DEFICIT IS FROM TRADE WITH UKRAINE AND RUSSIA

Karakuş evaluated the possible effects of the war and analyzed the situation by giving information about Turkey's place in the foreign trade balance of Ukraine and Russia. “The share of Ukraine in our exports is 1.2%. Russia's share is 2.5%. The sum of the two is 3.7% of our exports. In our imports, Ukraine's share is 1.7% and Russia's share is 10.6%. A total of 12.3% is supplied from these two countries. This means that we sell 1 to Russia and Ukraine, we buy 4 from these two countries in total. 50 percent of our total foreign trade deficit of 47 billion dollars is solely caused by these two countries. In agricultural products, the situation is more or less like this. Grain and oilseeds, which are feed ingredients, have a very high place in our imports from these countries," Ülkü Karakuş said.

10 MILLION UKRAINIANS REPLACED WHICH MAY HAVE DEEP IMPACT ON COUNTRY'S AGRICULTURE

Noting that agriculture is included in the history of humanity along with settled life, TÜRKİYEM-BİR President Ülkü Karakuş said that the ongoing war in Ukraine should be evaluated from this perspective as well. “25 percent of the population of 45 million Ukraine has been displaced. In other words, about 10 million people have been displaced in Ukraine,” he said. He pointed out the danger that this situation may have profound effects on agricultural production and logistics, he stated that there is a pessimistic atmosphere regarding the products that may come from Ukraine in the summer season. Noting that the Russian ports are active, Karakuş warned that the situation in Ukraine is the opposite.

WE HAVE ENOUGH OF GRAIN STOCKS, YET MILDLY SHORT OF OILSEEDS

TÜRKİYEM-BİR President Karakuş stated that after the war broke out between the two most important countries in feed ingredients' production, they have recently evaluated the status of the stocks in TMO and private sector licensed warehouses. Karakuş said that the grain stocks are strong enough to sustain the country through the season, but there is some deficit in oilseeds. He stated that this deficit could be closed with imports from Argentina, Paraguay, Uruguay, Argentina, and the USA and that the national risk was at a low level after the stock assessment made in this way. Karakuş further noted that this risk should be reduced by encouraging production.

WE SEE ABNORMAL PRICE INCREASES SINCE  PANDEMIC

In his speech in the program broadcast on Agro TV, Ülkü Karakuş also clarified the discussions about the prices of animal products in the country apart from the Ukraine-Russia war. The Chairman of the Union gave concrete information from the sector about meat and milk prices, which have been controversial due to the rapid changes in the market, and said that the current price of corn, which was 1300 lira at the beginning of the pandemic, is 5200 lira at the time. Expressing that it is better understood how strategic agriculture is with the pandemic, Murat Ülkü Karakuş stated that the barley sold from 1370 liras at the beginning of the process increased to 5000 liras. “The price of bran, which was bought for 1000 liras until recently, increased to 4800 liras for a while. Now it's down to 4000 liras. There is an increase in prices in parallel with the world,” he said.

FEED PRICES INCREASE IN THE WORLD, TOO

Acknowledging that producers are rightly complaining about increases in compound feed prices that exceed expectations, Karakuş noted that these hikes are being experienced by the feed industry due to feed ingredients increases. The experienced businessman, who labeled the price increases due to overstocking as manipulative, also stated that it is normal for governments to take such moves in order to ensure their food security and that this approach will continue in the coming period. He stated that apart from the increase in raw materials, the domestic energy and logistics costs have increased by 2-3 times. “Therefore, we have to reflect these increases in feed prices,” he said.

“The price of wheat, which was 200-230 dollars until recently, has increased to 500 dollars. The barley was $175 and is $300 now. We observe inflation in the global market, too. Feed prices are increasing in the world, too. This is not sustainable for the whole world,” he commented.

In the TV program in which he evaluated the conditions related to international markets, Karakuş reminded the effect of Russia's imposition of customs duty on exports stressing that it is one of the important grain producers and exporters. He said that both Ukraine and Russia remained 30 percent below their target in oilseed and grain exports, which they targeted last year. He noted that most of the carryover stocks have been purchased by China.

RAW MATERIAL COSTS INCREASED BY 51% YTD

Since January 1, the average cost increase in feed raw materials is calculated as 51 percent. The factors causing the change in cost are listed as exchange rate (22%), energy and logistics. Reminding that the compound feed production figures for 2021 have been announced, TÜRKİYEM-BİR President noted that Turkey is the leader of Europe with 27 million tons of compound feed production. He said that if the farmers producing their own feed and therefore not reflected in the official statistics are taken into account, the total figure can be calculated as 30 million tons. Karakuş mentioned that the logistics and road costs of transporting 30 million going to the facilities and 30 million returning (60 million tons in total) should also be considered. Ülkü Karakuş, who often repeats the view that a healthy production system will be built by putting the producer at the center, said that if the inevitable price increase is prevented by artificial means, the producer will have to refrain from production. “We have experienced examples of this in the history,” he warned.

AGRICULTURAL SUPPORTS SHOULD BE INCREASED AND DISTRIBUTED RELEVANTLY

Ülkü Karakuş stated that everyone who produces or has the potential to produce must be directed and encouraged to producte in a way specific to this year as extraordinary conditions are being experienced and said that the duty of the state here is related to agricultural supports. He claimed that it is important to conduct the agricultural supports in 2022 by "putting the producers- not the groceries- at the center," and "relevantly" and that 27-29 billion TL is very little compared to the need. He pointed out that a significant amount of resources have been allocated for the raw materials that TMO provided to the producers below the market price, but that some people abused this system and did not use the raw materials they have bought cheaply in production. "These people resell the raw materials they bought from the government at a cheaper price, through the back door, at a more expensive price. This moral question also needs to be resolved,” he said. “The supports allocated to agriculture this year should be advanced. And grain prices should be announced at the beginning of May, if possible, at a level that does not harm the producer. It is more vital for TMO to support wheat rather than corn and barley,” he concluded.