There are plans to privatize sugar facilities in Turkey. The Prime Ministry Privatization Administration announced this year its intention to sell off some of the 25 plants of the publicly owned Turkish Sugar Factories Company (Turkseker).
Privatization of sugar factories is necessary to reduce sugar beet production and to make Turkey rely again on starch-based sugar and also re-regulate the sugar market.
Turkey’s starch based sugar production capacity is approximately 1 million tonnes. The country’s starch-based sugar consumption is also 1 million tonnes. However, until recently, it was only allowed to produce 232,000 tonnes – the quota allocated under the Sugar Law. The quotas were increased to around 300,000 tonnes – which is only one-third of the demand. The remaining two-thirds of the demand is met by different sources.
Large companies obtained the right to import with a 15 percent tariff. These companies import glucose to isoglucose, which are not produced domestically due to quotas. Besides the demand is also met via other imports under the free trade agreements with several countries.
However, a rise in corn output has helped Turkey to some extent as Turkish industrialists are mandated to produce with “domestically produced corn”.
Starch-based sugar producers try to negotiate quotas with the government every year, however their demands are often not met. Some expect the privatization of sugar factories will ensure the quota promises will be fulfilled.
Meanwhile the privatization drive is heavily dependent on foreign investments and may allow starch-based sugar producers from USA to enter the Turkish market.
What are the predictions for Turkey’s starch based sugar market? How will privatization impact the demand and supplies?
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