Turkish rice demand remains slow following lira depreciation

London — The depreciation of the Turkish lira in late March has further hindered Turkish buyers' ability to conclude fresh business amid low domestic prices.

The lira depreciated by 10% against the dollar on March 22 in reaction to President Erdogan replacing the country's central bank governor. The lira was trading at approximately Lira 8.13 to the dollar on April 12, compared with Lira 7.22 March 21.

While Turkish demand for Italian rice was already described as "very quiet" by one major exporter, brokers said the depreciation had only further depressed demand. One reported "zero" buying interest from Turkey currently, while another said there was "no movement there."

A major mill anticipated that Turkish demand will only return during the Italian harvest, starting in September.

Despite the recent Turkish demand slow down, Ente Nazionale Risi data showed that Turkey was still Italy's biggest non-EU export market between Sept. 1-April 2, with Italian exporters shipping 25,351 mt to the country during this period.

While Greek sources had previously reported strong Turkish demand for 2020 crop, a Greek exporter said Turkish buyers had been "out of [the] market" for a month. A Californian source also reported that while some Turkish buyers were making inquiries in mid-March, these abruptly halted following the lira's tumble.

Other sources also reported in late March that buyers were still waiting for clarity from the Turkish government regarding whether the reduced import tariffs on rice products which are due to expire on April 30 will be extended, further deterring demand. A Turkish source said an extension was "not on the agenda at the moment" on March 30.

Additionally, domestic prices have been stable and relatively low in recent months as the Turkish Grain Board, or TMO, released stocks in the opening days of 2021, which also encouraged farmers to release their own stocks. As such, many sources are resigned to the likelihood that Turkish demand will be subdued for the near future, with buyers likely to show a preference for competitively priced Chinese old crop Japonica.