Turkey has started to import beef again from the EU.
While it is unclear as how this trade will develop in the coming months, from autumn 2010 through to the end of 2012 EU exports to Turkey provided a significant boost to the EU beef market.
In 2010 shortages of domestic beef on the Turkish market were contributing to increased food price inflation, which has occurred again this year. Turkey effectively allowed beef imports by reducing the rate of duty in autumn 2010, from a prohibitive 225 per cent down to as low as 30 per cent by early 2011. The tariff was gradually increased again, returning to 225 per cent by the beginning of 2013. The subsequent rise in beef imports was entirely supplied by the EU with Turkish importers mainly taking chilled young bull beef. Turkish beef imports in 2011 were as much as 111,000 tonnes with Poland the largest supplier followed by Germany. By early 2013 trade had ceased with Poland, the one remaining supplier at the end of 2012. By 2014 Turkish imports only amounted to 640 tonnes mainly supplied by Bosnia.
Data published by the OECD indicates a steady increase in per capita beef consumption over the last 10 years which now averages 8kg retail weight. The total beef market amounts to almost 900,000 tonnes cwe. In 2011 the sharp rise in imports more than offset the considerable fall in domestic production which since has moved up again, meaning large import volumes are no longer needed. Projections issued by the OECD earlier this year suggested that production would increase considerably in 2015, however it is possible that this has not been the case given that retail meat price inflation is now reported to be 30 per cent and hence the government action needed to reduce it.
In August 2015 the Turkish state-run organisation, the Meat and Milk Board (ESK), announced a tender for 10,000 tonnes of beef carcases to be supplied by the EU at zero customs duty. This was out of the total red meat quota of 19,100 tonnes according to Turkish sources. The 10,000 tonnes contract was won by Polish companies.
Besides beef, store cattle are also imported for finishing in Turkey, this trade re-commenced somewhat earlier than the product trade, in November 2014. France, in particular, benefits from this trade, shipping 42,000 head, mainly young stores, between November 2014 and June 2015. The other main supplier is Uruguay, but Brazil is also expected to enter this market following agreement on sanitary certification. The EU supplied 96,000 head in the first seven months of 2015, whereas there were no shipments in the same months of last year, with France the main supplier Hungary is the second largest.
In terms of implications for the UK market the resumption of EU trade with Turkey should at least give some indirect benefits, given the concerns about the increase in availability of Polish beef on the EU market. Data for January to June 2015 indicates that Polish beef production increased by 11 per cent on last year, while exports were up by as much as 17 per cent or 25,000 tonnes. Even exports of store cattle to Turkey could contribute in supporting the EU market.
It is unclear as to future developments in Turkish beef imports, but it is understood that the zero customs duty applicable to the EU will remain during the rest of this year. One key reason for the contract of 10,000 tonnes was to help meet the demand for the Muslim festival, Eid al-Adha, otherwise known in Turkey as the Feast of Sacrifice on 23 September. Once this has passed the demand/supply balance should improve helped by an upturn in availability of domestic beef including from stores imported earlier in the year and finished in Turkey.