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Summary
Turkey’s wheat flour industry is under mounting pressure in the current season, squeezed by lower domestic wheat production due to dry weather and restrictive government trade policies. The suspension of duty-free wheat imports for processing and re-export has sharply reduced flour exports, while rising competition and regional instability are further weakening Turkey’s position in the global flour market.
Weather and Policy Combine to Hurt the Sector
Turkey’s wheat flour industry is facing simultaneous challenges on both the supply and policy fronts. Dry weather has reduced domestic wheat output, while government restrictions on duty-free wheat imports have disrupted the industry’s export-oriented business model.
According to the US Department of Agriculture (USDA), Turkey has repeatedly altered its inward processing regime, which allows duty-free wheat imports for processing into flour and re-export. The regime was first suspended in the first half of 2024 due to record-high domestic stocks, reinstated by October, and then suspended again in March 2025. This policy uncertainty has made it difficult for flour exporters to retain global market share.
Sharp Fall in Flour Exports
The impact of these measures is already visible in export data. Turkey’s flour exports fell sharply to 1.44 million tonnes during July 2024–January 2025, down from 2.45 million tonnes in the same period a year earlier — a decline of 41 per cent.
Iraq, Turkey’s largest flour export destination, cut imports by more than 60 per cent as higher tariffs made Turkish flour less competitive. Iraq is also pushing to become self-sufficient in wheat and wheat products, further reducing its reliance on imports.
Turkey’s export prospects have also been hurt by internal political tensions in Iraq, particularly between the Kurdish federal state and the central government, which have disrupted trade flows.
Rising Competition and Capacity Constraints
Turkish flour mills are also facing stiff competition from Egypt in nearby markets. Combined with policy restrictions and weaker demand from key buyers, these factors are expected to push Turkey’s wheat flour exports to a decade low in the current season.
Turkey has significant processing capacity, with around 550 flour mills capable of producing nearly 33 million tonnes of wheat products annually. However, capacity utilisation remains below 50 per cent, reflecting weak export demand and regulatory constraints.
Lower Wheat Output Raises Import Dependence
On the production side, prolonged dry conditions are expected to reduce Turkey’s wheat output to around 16 million tonnes this season, at least 15 per cent lower than last year. Most wheat-growing areas in Turkey are rain-fed, making the crop highly vulnerable to extended dry spells.
Despite lower output, the USDA notes that wheat quality remains good. To meet domestic and export requirements, Turkey is expected to import more than 7 million tonnes of wheat this season. Around 5 million tonnes of these imports will be used for producing flour and pasta for export markets. Wheat imports are likely to accelerate after a slow start to the season.
Domestic Consumption and Price Controls Add Complexity
Turkey remains one of the world’s largest consumers of bread, even though population growth has stagnated. Given bread’s social and political sensitivity, the government is expected to continue regulating bread production and prices. These controls limit pricing flexibility for millers and add another layer of complexity for the flour industry.
Conclusion
Turkey’s wheat flour sector is navigating a difficult phase marked by weather-driven production losses, inconsistent trade policies and weakening export demand. While strong processing capacity and product diversity remain advantages, lower wheat output, policy uncertainty and intensifying regional competition are weighing heavily on the industry. How effectively Turkey balances import policy, export competitiveness and domestic price controls will determine the sector’s recovery prospects in the coming seasons.