In 2011-12 harvest, Trakya Birlik ended up buying 232,343 tonnes of

Local Market Developments
In the last 4 weeks, domestic crude sunoil
prices went up from $1,477/mt to $1,526/mt
with demand driven sales and rising
international sunoil and sunseed prices.
US$/TL exchange rate gradually rose from
1.85 to 1.88, touching 1.92 for a while amidst
government intervention. The demand in
second half of December was almost nonexistent but with the new year demand rapidly
picked up resulting in price rise. Turkish
vegoils stocks are running at a minimum since
the summer months, when industrialists offloaded stocks and ran on minimum levels with
collapsing sun complex. Early January saw
some stock building effort by major refiners
but domestic stocks are still at a record low
level. Trakya Birlik, who announced an
advance purchase price of 1,125 TL on 40%
oil basis back on 2nd September declared their
final price as 1,185 TL on the same basis on
22nd December. This meant a price premium
of 60 TL/mt, corresponding to $18.50/mt on
CIF Marmara basis. With original advance
price of $528.68/mt on 44% oil basis and
US$/TL exchange rate of 1.90 on the
announcement date of final price gives an
average sunseeds purchase price of $547/mt
by Trakya Birlik for the 2011-12 crop season.
In 2011-12 harvest, Trakya Birlik ended up buying 232,343 tonnes of sunseeds which is more or less their
own annual consumption quantity. On the other hand, CIF import price of 44% oil content sunseeds
between September-December 2011 averaged at $524/mt, therefore Trakya Birlik ended up paying a
premium of $23 per tonne to the farmers, over international market price. The top graphic on the right
shows the price development of domestic crude sunoil vs. import crude price from the beginning of 2011
until 6th January 2012. The botom graphic on the right shows the price development of sunflowerseeds
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on CIF Marmara ports basis versus domestic crop delivered factory for the same period. Turkey is currently
crushing almost 100% imported sunseeds imported from Romania, Bulgaria, Moldova and Ukraine. The
domestic crude oil market at the moment is operating at the cost, calculated on world sunseed prices.
The graph below shows the price development of domestic crude sunflower oil on ex-works Thrace basis,
from the beginning of 2011 and today, in US$/mt.
Turkish Oilseed Crops
Domestic oilseed production has reached at 1,93 million tonnes in 2010-11 season with 950,000 tonnes of
sunseeds, 880,000 tonnes of cottonseeds, 55,000 tonnes of rapeseeds and 45,000 tonnes of soybeans.
For 2011-12 season, we estimate a total Turkish oilseed production of 2.075 million tonnes. We now peg
Turkish cottonseed production at 1.1 million tonnes with 900,000 tonnes of sunseeds, 40,000 tonnes of
rapeseeds and 35,000 tonnes of soybeans. We see Turkish sunflowerseeds production according to
regions, as follows:
Thrace
Çukurova
Konya
Southern Marmara
Black Sea
Elsewhere
Total
450,000 tonnes
150,000 tonnes
110,000 tonnes
80,000 tonnes
55,000 tonnes
55,000 tonnes
900,000 tonnes
Industry
Consumer demand remained poor for most of December with moderate crushings and poor retailer
demand in front of the new year. Domestic sunoil stocks are still very low in comparison to this time last
year. After almost 2 years of weak demand for corn oil, the demand now is picking up. However sunflower
oil, certainly took the lion’s share in the last two seasons in Turkish liquid oils consumption and we expect it
to futher grow in 2012. In 2010-11 season Turkish liquid oils consumption grew by %20. Within the liquid
oils, share of sunflower oil grew by 6.5%, out-of-home share (mostly sunflower oil) grew by 20% and corn
oil lost 23%. We expect another 3-5% growth in liquid oils in 2011-12 season. Again in year 2011, Turkish
fats and oils market size reached 2.066 million tonnes, together with exports. We see this number going up
to 2.291 million tonnes in 2011-12 season.
Exports from Turkey to the Middle East, mainly Iraq are at record level at the moment. We expect total
Turkish exports of refined packaged oils to reach some 400,000 tonnes for 2011-12 season.
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International Market Developments
Turkish Vegoil Industry Report
AgriPro will release “Turkish Vegoil Industry Report” next week. Such a report will be published for the
first time since 1997. The 43 page report is an extensive study of statistics, analysis & the overview of
Turkish vegoils industry featuring, Turkish fats & oils trade balances, current and future vegoil market
size, geographical analysis and strategies of top players in view of ongoing consolidation in industrial
fats and liquid oil markets and a full production capacities study by region. The report will be an
essential tool for new and existing companies or funds planning investment in the sector and trading
companies operating in Turkey as well as an orientation tool for sector newcomers. Details about the
report and purchasing conditions can be viewed at our company website http://www.agripro.com.tr
China
China’s state grain stockpiler China Grain Reserves Corp. or
Sinograin, has entered the country's edible oil retail market.
Sinograin Oils Co.'s foray into a lucrative and intensely competitive
market sets up a contest with giant state-owned domestic rival
Cofco Group Corp. and foreign competitors including Singapore's
Wilmar International. Sinograin Oils began retail operations in
20,000 supermarkets in eastern and northern China in December,
China's state-owned Economic Daily newspaper said.
The
company aims to sell 200,000 metric tons of edible oil in 2012. The
unit's production base is at Zhenjiang cityin Jiangsu province.
Within two years, it intends to have completed plants at Tianjin as
well as Guangdong and Henan, among others, to reach an annual
bottling capacity of 700,000 tons, according to the report. Sinograin
subsidiary's move illustrates the allure of a domestic market valued
around $83 billion a year in operating income and provides cues as
to the ambitions of a company whose parent is better known for
administering China's state grain reserves. The Economic Daily
report said, "Foreign edible oil companies control more than half of
China's edible oil market, presenting challenges for the country's
'strategic security.'" China's Cofco Group Corp. has annual edible
oil processing capacity of more than 10 million mt accounts for
about 10% of China's edible oil retail market, trailing Singapore's
Wilmar International, which has about 50-60% of the market.
Brazil
Brazil, the world's No. 2
soybean grower, is expected to
produce 71.75 million metric
tons of the crop during its 201112 crop year, government
agriculture agency Conab said
today. Soybean production is
expected to fall 4.7% from
2010-11, though the latest
estimate reflects a 0.7%
increase from Conab's previous
forecast, published a month
ago. "In December, weather
conditions weren't favorable,
especially for corn and soy,
mainly in states in the southern
region," Conab said. Analysts
say dry weather caused by the
La Nina phenomenon will dent
grains production in southern
Brazil, though the rest of the
country has seen normal rainfall
in recent weeks.
India
India's edible oil imports will likely rebound this marketing year due to a smaller oilseed crop and rising
local consumption, a senior industry executive said today. Imports by India, the world's top buyer of
cooking oil, in the year through October 2012 are likely to rise 5% to 8%, Adani Wilmar Ltd. Chief
Executive Atul Chaturvedi told Dow Jones Newswires. The country's edible oil purchases fell 5% last
marketing year to 8.37 million metric tonnes due to a rise in local output, according to data from the
Solvent Extractors Association of India. Higher imports by India may further boost global prices that
have been rising for the past few weeks due to crop concerns in major producers such as Malaysia and
Argentina. India meets more than half of its annual requirement of 15 million to 16 million tonnes
through imports. "Imports will be higher as output of rapeseed crop is expected to be lower due to
adverse weather," Chaturvedi said. Trade executives say rapeseed output in 2011-12 could fall to about
6.0 million tonnes from last year's 7.0 million tonnes. India's total oilseed output in the crop year that
started July 1, 2011, is likely to fall below the government's target of 33 million tons as farmers have
planted more pulses and wheat. India produced a record 31.1 million tonnes of oilseeds in 2010-11.
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Sector Investments
American agribusiness giant ADM said it has bought three grain elevators in Slovakia, moving into the
country for the first time. ADM said that the silos will enable it to secure additional rapeseed and sunseed,
as well as corn and wheat from new supply sources. "The acquisition of these elevators extends ADM's
origination network along the Danube River, advancing our strategy to grow our reach in Central and
Eastern Europe," said ADM. The three new facilities, located in the south and east of Slovakia, have been
purchased from Palma Group a.s. and Polnonakup Hont a.s. They have a combined storage capacity of
149,000 metric tons, as well as train loading capabilities, ADM said. The company operates oilseed
processing facilities in the Czech Republic, Germany, Netherlands, Poland, the U.K. and Ukraine.
Another agriculture giant Bunge announced that it has completed the construction of a port terminal in
Nikolayev in southern Ukraine. With a storage capacity of 140,000 tonnes, the terminal offers a loading
potential of an estimated 4 million tonnes a year.
Our past reports can be viewed at our web site www.agripro.com.tr under “Market Reports” tab.
Price Quotations (US$/TL 1.87)
Price quotations as of Tuesday 10th January 2012 are as follows:
Import:
- Black Sea origin Sunseeds (44% bss) - CIF Marmara - $ 540
- Ukraine origin Rapeseeds (42% bss) - CIF Marmara - $ 595
- US Soybeans - CIF TR - $ 495
- Brazil Soybeans - CIF TR - $ 510
- RBD Palm Oil
- CIF TR $ 1,130
- RBD Palm Olein - CIF TR $ 1,140
- RBD Palm Stearin - CIF TR $ 1,030
- Black Sea origin Crude Sunoil - CIF Marmara/Mersin - $ 1.135/$ 1.155
- South America origin Crude Degummed Soyoil - CIF TR - $ 1.235
- USA Crude Degummed Corn Oil - CIF TR $ 1,380
- Black Sea origin 36 protein Sunmeal - CIF Marmara - $ 185
Domestic:
- Crude Sunoil - ex-works Thrace - $1,526
- Crude Rape Oil - ex-works Aegean/Çukurova - $ 1,500
- Crude Soyoil - ex-works Aegean/Çukurova - $ 1,170
- Crude Corn Oil - ex-works - Southern Marmara - 3,100 TL
- Semi-refined Cotton Oil - ex-works Çukurova - 2,300 TL
- 28 protein Sunmeal - ex-works, Thrace/Agean/Çukurova - 270 TL/310 TL/310 TL
- Rapemeal - ex-works Thrace/Agean/Çukurova - $ 2900
- 47 protein Soymeal - ex-works Agean/Çukurova - $ 470
- Cottonmeal - ex-works Aegean/Çukurova - 420 TL
AgriPro Limited
© Copyright 2011 AgriPro Limited
This report is personal to the individual recipients. Any reproduction or redistribution of contents without written consent of AgriPro Ltd. is strictly
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However we cannot be held responsible for accuracy of the information in our reports, forecasts and/or price indications and them being taken as
basis to any commercial contract.
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