The coup attempt in Turkey could have implications for Canada. First of all is the ongoing challenge faced by Canada's efforts to finalize the CETA free trade deal with the European Union. These efforts have been impacted by distractions from the recent Brexit vote, the recent terrorist action in Nice, France and now the recent coup attempt in Turkey. In the words of one analyst quoted on the radio, a successful coup could have set-back democracy within Turkey by 10 steps, while the success of Turkey's President Erdogan to thwart the attempt will only set that country's democracy back by five steps, or in other words, a difficult situation either way.
According to Bloomberg, about 20,000 people have been detained, fired or arrested by the Turkish government, including military leaders, judges, government prosecutors and finance ministry members. Tensions are rising over the potential use of the death penalty; this is against European Union's policy and jeopardizes Turkey's desire to join the EU. "No country can become an EU member if it introduces the death penalty," stated Federica Mogherinin, the EU's Foreign Policy Chief. Reuters reports that the Turkish government acted as if it had a list of candidates for arrest ready in advance, as if the current government was behind the entire event.
Trade is another area which could impact Canada and more specifically, agriculture. In 2014, bilateral trade between the two countries totaled $2.4 billion, making the country Canada's 34th largest trading partner. The country is Europe's third largest, at 78.2 million people, following Germany and Russia. Turkey has been used by Canada as a means to access markets in other European countries.
Statistics Canada's Exports of Grains, by Final Destination which reports exports of wheat, durum, oats, barley, rye, flaxseed, canola, wheat flour and malt, shows only limited volumes of grain shipped by Canada to Turkey. To-date this crop year, with August-through-May data available, 60,600 metric tons of wheat has been shipped, above the five-year average of 17,300 mt. A further 79,500 mt of durum has been shipped in the August-through-May period, above the five-year average of 54,863 mt. Also, the report shows 1,036 mt of flax shipped to-date this crop year, which is by far the largest volume shipped since the 2009/10 crop year.
Lentils are one crop where exports to Turkey remain a key to Canada's export program. Canada's second-largest lentil customer after India, the attached chart shows exports over the past five years ranging from 169,372 mt in 2012/13, or 9.2% of Canada's total export volume, to 2014/15 exports which totaled 385,901 mt, or 17.7% of total exports. The yellow bar represents the cumulative exports for the current crop year, with 386,795 mt shipped in the first 10 months (August through May), representing 19.1% of the total shipments year-to-date.
A recent Western Producer article titled Lentil Empire Built on a Handshake described the formation of Alliance Grain Traders through a partnership with Turkish businessmen; it began in 1997 and evolved into one of the largest pulse suppliers in the world. The article said Turkey produces roughly 400,000 mt of lentils which it consumes, while remains a vital link to countries which remain a challenge for Canadian companies. As indicated by Grant Winton of Alberta Agriculture, "Turkey, on the other hand, is comfortable dealing with these markets. They have been for centuries. For Canada, it could be a step too far to sell from Rural Alberta to rural Iraq."
Canadian traders will watch the developments with keen interest.
DTN 360 Poll
This week's poll asks what you think will be the largest seeded acreage revisions seen going forward, given Statistics Canada's most recent estimates. You can weigh in with your thoughts on the DTN 360 Poll, found at the lower-right of your DTN Home Page.
Cliff Jamieson can be reached at email@example.com
Follow Cliff Jamieson on Twitter @CliffJamieson
© Copyright 2016 DTN/The Progressive Farmer. All rights reserved.