First transactions at Commodity Exchange to be made on wheat
Mehmet Simsek, Turkish Deputy Prime Minister in charge of economics, said that the Commodity Exchange will go into operation within the shortest time and will enable the market to be balanced within price stability. Simsek reminded that a government decree was published in April for the establishment of the Incorporated Company of Turkish Commodity Market to enable physical transactions for agricultural commodities as well as using product notes.
The final official authorization will be given for the commodity market after completing legislations about the functioning of the market and making the transaction system operative in coordination with the Capital Markets Board and the Ministry of Customs and Trade, said Simsek. Ankara based commodity market will be owned by the Turkish Union of Chambers and Commodity Exchanges (TOBB), Turkish Grain Board (TMO), 33 commodity exchange markets, Istanbul Stock Exchange, Central Registry Agency (MKK), Takasbank, Ziraat Bank, Halk Bankasi and Vakiflar Bankasi.
Simsek stressed that the aim of the system is to trade basic crops and finished products which can be stored and standardized with modern infrastructure and storing products in healthy environments. With products notes; trade will be easier and producers, traders and industrialists will be encouraged, he added.
Simsek said that the price stability will be ensured within supply and demand balance and the technical infrastructure is ready with regard to licensed warehousing businesses and electronic product notes. There are now 39 licensed warehouses which have gained permission to get into the act in Turkey. Currently, electronic notes for products being transacted in 9 commodity markets are being monitored by MKK. Simsek added: “We expect to see that the transactions for wheat and cotton that constitute a large share of agricultural output and stock of the country will be traded. Products such as hazelnut, apricot, fig, olive, and pistachio will also be subjected to trade in the future.”
COSTS TO DECREASE FOR PRODUCERS
Simsek reminded that normally harvest seasons see price falls because of excess supply but thanks to that system price falls will be prevented and the market will come to the balance within price stability. He added: “Producers will not have to sell their products to a limited number of local traders so they will benefit from the competition between many traders.”
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