Wednesday, May 20, 2015

Is there a potato conspiracy in Turkey?

Not sure how to trade this, outside of shipping physical.
From Al Monitor's Turkey Pulse:

A vendor sells potatoes and other vegetables to a customer in an open market in central Ankara, Feb. 5, 2014. (photo by REUTERS/Umit Bektas)
Potatoes are not to be taken lightly. In the 1840s, the history of a nation was swayed when disease ravaged Ireland’s potato crops and the resulting famine reduced the country’s population by some 25%, as a million people perished and at least another million emigrated during the seven years now known as the Great Famine, the Potato Famine or Gorta Mor in Irish.

In 1996, I was among journalists who accompanied Turkey’s parliament speaker on a visit to Ireland. Irish officials spoke with gratitude about the three grain and potato-laden ships the Ottomans sent to Ireland in 1847 as the Great Famine plagued the country. During the visit, a plaque of gratitude for the Ottomans was placed on the historic town hall building in Drogheda, where the aid ships had arrived.

Turkish potatoes, which helped relieve the Irish famine, are now feeding people in war-torn neighboring countries. Turkey’s potato exports rose to 300,000 tons in 2013 as the demand from Syria and Iraq soared. Exports to the two countries are still continuing today.

The reason for the potato’s appeal in times of war and famine lies in its nutritive value as a rich energy source. The potato helps relieve fatigue, meets the body’s water requirements, detoxifies blood from the chemical residues of air pollution, radiation and pesticides, and helps cell renewal.

But amid the increase in exports, the potato output in Turkey declined, sending prices skyrocketing on the domestic market. The origin of Turkey’s potato crisis lies in the overproduction in 2012, Semsi Bayraktar, head of the Turkish Agricultural Chambers Union, explained in an interview with Al-Monitor.

Bayraktar said potato production hit a five-year high of 4,795,000 tons in 2012, well above Turkey’s annual consumption of some 4 million tons, sending prices as low as 0.3 Turkish lira per kilo (about 15 cents at the time). Loads of crops were left unsold and then used to make fodder. Reeling from huge financial losses, many farmers abandoned potato cultivation the following year, bringing the 2013 produce down to 3,948,000 tons. In the meantime, exports began to increase, driven mainly by Syrian and Iraqi demand, which led to a shortage and climbing prices on the domestic market.

The prices fluctuated between 1 and 3 Turkish lira in 2013, hit 4 and then retreated to 2 to 3 lira in 2014 before climbing to 5 lira last month.

Bayraktar said he expected the prices to fall in the coming weeks. “The produce had fallen in 2013 after potato plantations shrank following marketing problems the previous year. In 2014, adverse weather conditions kept the produce at 4,166,000 tons. Then in January 2015, frost hit the fields. So, the decrease in the crop has been pushing the prices up over the past two years. But now the new harvest season has arrived. The prices will begin to fall by themselves. Allowing potato imports at this time will harm producers,” Bayraktar said.

The government has blamed the rising prices on hoarding, but this alone cannot explain the shortage....MORE