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by Russia, such as Egypt, with “this success is a direct consequence of sanctions,” according to Mr Zlochevsky. Russia is adapting to this situation, Russia now measures profitability per hectare rather than per tonne. This small tweak has seen their most recent compound annual growth rate projection well ahead of global trends; with the main driving force being, “low production costs.” However, Mr Zlochevsky warned against becoming too fixated with low production costs, as “Affluent people want to buy cheap things but cheap things are a brake on progress. We must protect the interests of consumers by not supplying cheap alternatives.” That said, Russia’s growth is currently well ahead of world trends, despite the fact that they are currently heavily sanctioned due to events in the recent past. With regards to the aforementioned sanctions, Mr Zlochevsky believes that the “question is not if, but when sanctions will be lifted.” Mr Zlochevsky concluded his address by sharing his view that Russia, “are seen as a threat to our competitors as we, as Russia is so competitive. It will be in the interests of our competitors to impose as many restrictions as possible in order to maintain their market share.” One country that has recently been in conflict more directly than others recently is Turkey, although their wheat trade has remained continuous. Mr Günhan Ulusoy: Milling industry and trade perspectives Following the conclusion of Mr Zlochevsky’ address, the next speaker to address those assembled was Mr Günhan Ulusoy. In May 2015, Mr Ulusoy was appointed chairman of the Board of the Turkish Flour Industrialists Federation (TFIF). He is also currently the Chairman of Ulusoy Un Sanayi ve Ticaret A.S. All of which places him in a very good position to discuss the current trade and logistics situation in Turkey. Mr Ulusoy began by stressing the importance of “appreciating our history,” as it “helps us understand our present and our future.” However in the present, “25 percent of Turkish population is currently employed in agriculture – worth US$6 billion.” In Turkey, wheat is currently the biggest crop, and of the seven regions, Central Antalia is the most productive, with “21.8 million tonnes in 2008 compared with 22.6 million tonnes last year,” according to Mr Ulusoy, who added that this is a, “remarkable increase of corn from year to year.” The Turkish government does offer some assistance to its agricultural industry, they industry also enjoys a lot of protection from Turkish Grain Board (TMO). In fact, in 2014 TMO purchased 12.5 million tonnes according to Mr Ulusoy “but there was a bumper crop in 2015.” Government intervention also saw the region of SE Antolia’s yield increase, “from 1 to 2 million tonnes due to the culmination of an irrigation project.” In terms of exports, Kazakhstan are still Turkey’s main export market, although they do export to over 100 countries worldwide, including the far east, where some importers are starting to import more from Turkey. In order to survive, countries need to adapt. Citing the examples of Italy and the UK, “Italian millers lost their market

share, whereas the UK consolidated their position by partnering with supermarkets.” However, more commonly, Mr Ulusoy told delegates that, “as margins get tighter, the industry will look at ways of making profits.” As the global market landscape changes, nations must adapt their policies to ensure they are able to remain competitive. A prime example of a nation that has adapted is the USA. Mr Alan Tracy: The changing landscape of world wheat trade The final speaker of the final session was Mr Alan Tracy, President US Wheat Associates. As President, Mr Tracey coordinates the global export market development program for US Wheat Associates. He also maintains close contact with trade and government representitives, the US Department of Agriculture and other partner organisations to promote all six classes of wheat in more than 100 countries around the world. US wheat leads trade but the trend in soybean suggests that the market is expanding rapidly. “Wheat is real food for real people,” and according to Mr Tracy, “wheat is more complex, more sensible and other than the politics – more fun!” Market decisions are smarter than political decisions Currently, the US exports 17.9 million MT to Africa and Middle East. However, the US market share has been greatly reduced by Russia’s rise, which Mr Tracy describes as being “volatile” and “driven by weather and political decisions.” This change in the landscape has greatly affected US imports. According to Mr Tracy’s statistics, in 1985 – “90 million MT,” compared with “15 million MT” in 2011; a move that he refers to as a “dramatic change.” However, the US has adapted to this shift in the markets by raising 12 million MT in new business with, “quality buyers.” According to Mr Tracy, “US wheat is no longer an agricultural commodity – now an ingredient and is generating more cash per mega tonne.” Evidence of this can be seen in a recent large purchase of US flour by South Korea, as according to Mr Tracy, “it is a high quality, highly desired product.” The weather of course another key consideration, although Mr Tracy did provide delegates with an optimistic forecast for this year, “we should experience a dry August in North America, which will have a significant impact on the landscape.” On that subject of the current economic landscape, Mr Tracy then referred to several studies that discussed how there is “a lot of evidence available” of global markets being distorted by wheat support prices in China that are, “well above market levels.” Mr Tracy then drew delegate’s attention to the loan rate figure; which is an indicator of “supports in certain countries,” with some soaring well above WTO limits, including China, India, Brazil and Turkey, with the impact country by country being over US$1 billion less in revenue. Mr Tracy concluded his address by stating that, “US volume share is down but value share is up,” adding that, “domestic support in China and other countries is now the biggest distortion of production.” The conference was then closed by Etsuo Kitahara who thanked delegates for attending an “interesting and enlightening day” and invited everyone to next year’s Conference on Tuesday 6th June 2017. Milling Milling and and Grain Grain -- July July 2016 2016 || 95 95

JUL 2016 - Milling and Grain magazine