A starch-based sugar market for the U.S.?
The privatization of sugar facilities is not just a way to sell factory buildings or factory lands for unearned income. The main purpose here is to re-regulate the sugar market.
To do this, privatization of sugar factories is necessary to reduce sugar beet production and to make Turkey rely again on starch-based sugar. Who will benefit from the privatization and the new market order, and how?
When this question is addressed, the main goal of the privatization becomes clearer.
The Starch and Glucose Manufacturers Association (NÜD) President Rint Akyuz called me recently. It’s useful to share some highlights from that relatively long conversation.
We import much more starchbased sugar then we produce
Aykuz was uncomfortable with associating sugar factory privatization with Cargill, the U.S. sugar giant, and starch production.
“Turkey has a starch-based sugar production capacity of about 1 million tonnes,” he said. “The quota allocated to us with the Sugar Law is 232,000 tonnes. Deputy Prime Minister Mesut Yilmaz promised to lift the quotas in four years. It’s been 18 years. We still expect the quota to be lifted. Currently, the production quota allocated to us is around 300,000 tonnes. Turkey’s starchbased sugar consumption is one million tonnes. We produce only a third of this need. Do you think, the remaining two-thirds of the production is covered with sugar obtained from sugar beet? No. Others provide this remaining two-thirds. Large food companies obtained the right to import with a 15 percent tariff by telling the ministry that they are suffering and that they cannot find liquid sugar. Big companies import what they need with low taxes. Glucose and isoglucose, which are not produced domestically due to quotas, are covered through imports. Besides, there are free trade agreements in force with many countries. Imports are made within the framework of those agreements.”
Big rise in corn output
Aykuz went on to explain that last year was not the first time the industry received an increase in quotas and that there are other ways for starch-based sugar to enter Turkey.
He emphasized that because it is compulsory for Turkish industrialists to produce with “domestically produced corn,” two tonnes of output per thousand square meters was possible with drip irrigation in Konya, compared to 600-750kg in the U.S.. Turkish corn producers should be appreciated for their success, he said.
According to Akyuz, starch-based sugar producers negotiate quotas with the government every year based on data they submit. There are promises made and promises unfulfilled. The privatization of sugar factories will ensure promises will be fulfilled.
There is also a strong reaction in the public across the country regarding privatization. The government is worried about this grassroots opposition to the privatization of sugar factories.
The privatization of the agriculture and livestock sectors in Turkey, for instance, was foreign dependent. Billions of dollars-worth of these products are now imported into Turkey. We became a livestock market for Europe And now, after the privatization of sugar factories, is Turkey set to be a starch-based sugar market for the US?