Miller Magazine Issue: 141 September 2021

74 INTERVIEW MILLER / september 2021 Fourthly, I think that our state should be encouraging by creating a legal, economic and social environment that will enable farming to be done efficiently with high technology. On the other hand, I think that the contract farming prac- tice will be beneficial for some products that are low in production and not preferred by the farmer, or for specific wheat varieties. It is said about the post-epidemic that, “Nothing will be the same as before. The epidemic will be a mile- stone.” We are already experiencing the effects of this in many areas of life. So, what kind of process do we have in front of us in the milling industry? What innova- tions, changes or standards will this epidemic bring to the industry? Deglobalization, which was on the rise even before the pandemic, seems to have gained a little more power with the pandemic. Countries will take steps to reduce their dependence on foreign sources, especially in basic food- stuffs. Agricultural production and food processing indus- tries will gain even more importance. Likewise, they will diversify their food suppliers, and they will not want to be tied to a single supplier country. WORLD FLOUR TRADE TO DECREASE Turkey’s Black Sea neighbors such as Russia and Ukraine, which increase grain production, especially wheat, are renewing their milling infrastructures. The Russian government encourages the sale of high val- ue-added products instead of raw materials. Are these developments a risk for Turkish flour producers? What steps should be taken to prevent the market share from shrinking? First of all, we need to focus on the world flour trade in order to analyze the risks we face. We divide the world flour trade into three categories in our internal analysis. The first category is exports made in the form of border trade. Here, on one side of the border, there is a competi- tive flour producer, on the other side there is another coun- try that needs flour. For example, Turkey's exports to Syria and Iraq, exports from Kazakhstan to Afghanistan or from Argentina to Bolivia. Border trade has advantages such as the fact that buyers and sellers mostly know each other, payment in local currency, credit mechanism, transit time is very short compared to overseas imports, and the product is fresh on delivery. It is often not possible for the flour of a non-bordering third country to enter this trade. Our studies show that the share of this type of border trade in world flour trade is around 47% with 6.5 million tons. The second category of flour exports is exports within a trading bloc. Here, thanks to customs union agreements between states, countries can export flour to each other without paying import tax. The European Union, ECOWAS, COMESA, MERCOSUR and ASEAN are the most important trading blocks. In this way, Vietnam, which is an ASEAN country, can export to another ASEAN country, Thailand. Likewise, Egypt, a member of COMESA, can export to Madagascar, a member of COMESA, or Guinea, a mem- ber of ECOWAS, can export to Siera Leon, another mem- ber of ECOWAS, without paying the import duties for the countries outside the bloc. Exporting flour from a country outside the trade bloc to countries with very high import duties is still not possible due to tax disadvantages. The ratio of exports made within the trade bloc to total world exports is at the level of 33%. The third flour export category is overseas export. In this category, a competitive country exports to a neighboring country or to another distant country where it is not in the same trade bloc. The best example of this is, of course, Turkey. The share of overseas flour exports in total world exports is 20% with 2.7 million tons, and Turkey carries out 60% of overseas flour export alone. Turkey exports flour in the form of border trade and overseas flour trade. The two countries with which we do border trade, Iraq and Syria, account for 52% of our total exports. We know that large mill- ing investments have been made in Northern Iraq recently. When these investments are completed,