Turkey's primary wheat provider, Russia, to halt export taxes on grains
In a significant development, Turkey has introduced a duty-free wheat import policy under its inward processing regime on March 19, 2025. This policy, aimed at easing import restrictions, has led to a resurgence and increase in Turkish wheat imports from Russia.
The Turkish Grain Board (TMO) officially lifted wheat import restrictions on March 18, 2025, reopening imports fully under the inward processing regime. This move was welcomed by Turkish flour exporters as it allows them to import more wheat, mainly from Russia, improving export capacity.
According to the USDA Foreign Agricultural Service (FAS), Turkey’s wheat imports for the 2025–26 marketing year are projected to rise to around 8 million tonnes, up by 4 million tonnes from the previous year. Russia remains Turkey’s primary wheat supplier in this forecast period, consistent with the duty-free import policy facilitating Russian wheat entry into Turkey.
In response, Russia has suspended its grain export tariffs, a decision likely aimed at supporting increased trade with Turkey, aligning with the new duty-free wheat import policy under Turkey’s inward processing regime.
Despite a projected decline in overall wheat export volumes from Black Sea ports in July-August 2025 due to various economic factors, the bilateral wheat trade with Turkey is expected to strengthen because of Turkey’s relaxed import regime.
The inward processing regime reinforces Turkey's dependence on major suppliers such as Russia. This policy allows Turkish flour mills to import wheat without paying customs duties, provided they export an equivalent quantity of processed flour.
Meanwhile, the earthquake that occurred in Balikesir province on a magnitude of 6.1 was felt in Istanbul. While the impact of the earthquake on the wheat trade remains to be seen, it is clear that the duty-free policy has significantly influenced the trade between the two countries.
Russia was the largest exporter of grain in 2024, exporting a record 72 million tons, up from 68.6 million tons in 2023. In 2024, Turkey was the second-largest grain customer of Russia, importing 7.2 million tons. Saudi Arabia was the fourth-largest buyer, importing 4.6 million tons, while Bangladesh was the fifth-largest, importing 3.9 million tons. Iran was the third-largest buyer, importing 5.6 million tons.
The current reference prices in Russia stand at 18,000 rubles per ton for wheat, 17,875 rubles per ton for barley, and 16,875 rubles per ton for corn. The benchmark export prices reported by Interfax this week were $223.5 per ton for wheat, $199.7 for barley, and $220 for corn.
In an effort to curb prices, Russia has enacted a 'grain damper mechanism' where duties are recalculated weekly based on price differences. Barley tariffs have already been at zero for an extended period.
As the situation develops, it is expected that the duty of 19.4 rubles per ton on wheat and 371.5 rubles per ton on corn will be temporarily eliminated. This decision, if implemented, could potentially lead to a further increase in wheat trade between Turkey and Russia.
In conclusion, the duty-free wheat import policy under Turkey’s inward processing regime has significantly impacted the wheat trade between Turkey and Russia, leading to an expected increase in Turkish wheat imports from Russia. This policy effectively lifted wheat import restrictions that had been in place since June 2024, which had previously constrained Turkish flour exports and competitiveness.
- The Turkish Grain Board's decision to lift wheat import restrictions in March 2025, under the inward processing regime, has paved the way for a surge in Turkish wheat imports from Russia.
- Turkey's new duty-free wheat import policy, effective March 19, 2025, has been instrumental in making Russia the primary wheat supplier for Turkey in the 2025–26 marketing year.
- In response to Turkey's duty-free policy, Russia suspended its grain export tariffs, aiming to foster increased trade between the two countries.
- The strengthening bilateral wheat trade between Turkey and Russia, despite a projected decline in overall wheat export volumes from Black Sea ports, is a testament to the significant influence of Turkey's relaxed import regime.
- As a result of the duty-free policy, Turkish flour mills can import wheat without customs duties, thus boosting their export capacity and potentially having a significant impact on the personal-finance sector, given the importance of flour exports to the Turkish economy.
- The technology sector in Istanbul, among other urban centers in Turkey, may also see an impact from the increased trade with Russia, as a more prosperous business environment could lead to advancements in technology and lifestyle industries. The recent earthquake, while not directly affecting the trade, serves as a reminder of the potential vulnerable aspects of Turkey's economy, which may need to be addressed for sustained growth.
