THE GLOBAL WINDOW OF TURKISH FOOD AND AGRICULTURE The Global Window of Turkish Food and Agriculture Sector
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Founded in 2009 by Brazil, China, India, Russia, India, Russia and South Africa, BRICS has become an economic powerhouse, with Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates (UAE) joining in 2024, accounting for more than 37 percent of global gross domestic product. Now two and a half times the economic size of the EU, BRICS is more of an economic power than a geopolitical one.
At the 2024 Kazan summit in September 2024, both the Russian leader and the Chinese president made statements that the BRICS could be a powerful alternative to the economic and political hegemony of the Western countries. ‘From now on, the era of the ‘Global South’ in world development begins. The BRICS club will be the guarantor and locomotive of the world economy, politics and security.’
When it comes to world food security, CEREALS (wheat, barley, rice, maize, millet) and legumes come to mind first due to their storability, suitability for long storage and transport, and the absence of any problems in their consumption.
Nowadays, when agricultural production is adversely affected due to increasing population, climate change with its heat, rain, frost, storms, climate change and war, it would be appropriate to analyse the role of BRICS in the production and trade of these products. In particular, the proposal of the Russian Grain Exporters’ Association (RUSGRAIN) to establish a BRICS Grain Exchange is striking. According to some, BRICS aims to end free pricing in the global wheat market by creating an OPEC-like cartel and a grain exchange.
Let us state at the outset that global warming, war and consolidation are complicating the world agricultural sector
Wheat production is expected to fall in 2024-25 due to climate problems in Russia. According to the latest estimates, the country’s wheat production in this season will be about 10 million tonnes less than 92 million tonnes in 2023-2024. Maize production is estimated at 13.3 million tonnes, down from 16.6 million tonnes in 2023-2024. Total production in the oilseeds category is also about 30 million tonnes. In this case, Russia’s total production of wheat, barley, corn, rye, oats, millet, buckwheat, paddy and legumes in the coming season will be around 130 million tonnes. According to FAO, agriculture plays a vital role in the Russian economy, contributing 25 per cent to net production output, employment and capital investment. According to 2022 data, agriculture accounted for 3.9% of the country’s GDP and employed 5.7% of the labour force.
Russia exported 60 million tonnes of grain in the 2023-24 trade season, 54 million tonnes of which was wheat. Although some western companies stopped trading grain from Russia in July 2023, there were no problems in exports.
In 2022, Russia produced 15 million tonnes of flour, including 13.5 million tonnes of wheat flour and 1.5 million tonnes of rye flour. Russia started to export large quantities of flour in 2022 and this increased by 350% compared to the previous year. Immediately, the question comes to mind: ‘Could Russia also turn to Türkiye’s flour markets?’
China, India and Russia are the three largest producers of wheat, accounting for more than 42 per cent of global production. Russia is the world’s largest wheat exporter and one of the three largest grain exporters. Brazil and South Africa are stable grain exporters (maize, soy beans, wheat) and have a significant influence on world grain trade. The newly recognised BRICS countries play an important role in the world grain market as major importers of cereals and cereal products.
The five founding BRICS countries occupy a unique position in the global grain economy, being among the largest producers and consumers of staple grains such as rice, wheat, maize and barley. They are not only major exporters, but also important importers… For example, India and China together produce more than half of the world’s paddy, while both countries top the list as the largest consumers of rice. China is the world’s leading importer of maize, soy beans, wheat, barley and sunflower seeds, while Russia is the largest global exporter of wheat. Together, China, Russia and India account for more than 40 per cent of world wheat production. Meanwhile, Brazil and South Africa are the leading exporters of wheat, maize and soy beans.
Beyond their own alliances, BRICS countries are also important players in international grain trade. For example, China imports a significant portion of its grains such as wheat, maize and soya beans from countries such as Australia, Argentina, the European Union and the United States. In addition, Brazil and Russia export grains to more than 100 countries. However, the prices of grain imports and exports are primarily determined by stock exchanges in North America and Europe. Despite its status as a leading wheat exporter, Russia lacks its own international grain exchange. Since most transactions take place on Western exchanges, deals are concluded in US dollars, which – due to sanctions imposed after the invasion of Ukraine – has created difficulties for Russia. For these reasons, it is expected that it would be appropriate to establish a new BRICS grain exchange, thus creating an OPEC-like cartel and ending the free pricing in the global wheat market.
BRICS countries also support Russia’s grain exchange plan and expect it to be extended to other major agricultural products in the future. By establishing a grain exchange within the BRICS, Russia, as the world’s largest wheat exporter, will have a pricing system to rival international grain futures markets such as the Chicago Mercantile Exchange.
By Professor Dr. Nazimi Açıkgöz,
