Growing Hostility Between Turkey and Russia Could Benefit U.S. Rice

Mar 29, 2017
Eat up, son
IP-Growing Hostility Between Turkey and Russia Could Benefit US 2-170329

ANKARA, TURKEY – USA Rice maintains a robust program and trade servicing program here to ensure U.S.-grown rice maintains a strong presence and identity in the market.  As a result, Turkey is a top ten destination for U.S.-grown rice and exports have averaged more than 192,000 metric tons over the past four or five years. Now those exports are poised to gain as Turkey and Russia are engaged in an all-out trade war on agriculture goods.

Turkey and Russia have a complicated and intertwined history that dates back hundreds of years, and the two countries have maintained a healthy respect for each other, if not a full working relationship. However, that relationship has been under great strain as of late.

In November 2015, a Turkish fighter jet shot down a Russian plane near the Turkish-Syrian border during an airspace dispute.  Russia slapped several economic sanctions on Turkey, including banning some agricultural imports.

Full-scale war was avoided and the parties worked to normalize relations. But then in August 2016 Turkish President Erdogan called the Russian annexation of Crimea “Crimea’s occupation.”  And in December, a Turkish gunman assassinated the Russian Ambassador to Turkey in an art gallery in front of horrified onlookers.  Although considered by most, including Russian President Vladimir Putin, to be a provocation designed to derail the warming relations between Turkey and Russia, the incident escalated tensions.  Tensions that are now hitting trade in food.

In February, Russia lifted the 2015 ban on imports from Turkey of onions, shallots, cauliflower, broccoli, salt, carnations, and gum, but the economic impact to Turkey was minuscule – and at less than $20 million, far below the relief the Turkish government expected.

Turkey responded recently by banning the import of corn, wheat, crude sunflower oil, sunflower seeds, peas, and rice from Russia.  This annual trade is estimated to be worth $1.3 billion and clearly got the Russian government’s attention.

An upcoming trade mission of Russian officials to Turkey to discuss ending the trade skirmish has been canceled until the new Turkish bans are lifted.  Sixteen tons of Turkish fruit has been rejected by Russia, and importantly here, the brisk trade in tomatoes, worth about $250 million annually, has been shut down.

While this is going on, 25,000 metric tons of U.S.-grown rice are on their way to Turkey, and two importers are considering purchasing another 50,000 metric tons according to the trade here.

USA Rice continues to keep a bold presence in country, with 95 earned media placements in January and February, and in-store demonstrations every week.

“Turkey has always been an important market for U.S. rice and I think we are a valued supplier,” said Hugh Maginnis, vice president of international for USA Rice. “While this trade battle goes on between Turkey and Russia, it’s important for the Turkish government and trade to know they can continue to count on the U.S. to deliver high quality rice that their people love and depend on.”