Turkish Mercantile Exchange Electronic Warehouse Receipt Market Annual Assessment for 2022
Electronic Warehouse Receipts (EWR) trading increased by 3.6-fold in 2022 compared to year before.
In the Turkish Mercantile Exchange (TMEX) EWR Market, where 17 different commodities such as wheat, corn, barley, pistachios, legumes, hazelnuts, dried apricots, cotton, olives and oilseeds are traded as Electronic Warehouse Receipts, the total trading volume increased 3.6-fold, while the number of transactions increased 2.5-fold in 2022, compared to 2021.
Despite the food supply security and geopolitical risks, a lively market was experienced in 2022 thanks to a productive harvest. TMEX completed the year 2022 with a successful performance by providing uninterrupted service to the market. In 2022, in more than 377 thousand transactions, total traded value reached 67 billion TL and total traded volume reached 11.4 million tons. The share of the private sector and the Turkish Grain Board (TMO) in the total trade value in 2022 recorded a balanced level of 50-50%. Since the EWR Market commenced operations in 2019, a trading volume of 28 million tons and a trading value of 100 billion liras have been realized in over 729 thousand transactions.
Agriculture sector and our exchange completed 2022 with a thriving performance thanks to the high yield recorded in commodities that are important inputs of both food and animal feed industries (commodities such as barley, wheat and corn, which are our strategic commodities for food supply security), and TMO’s active and dynamic use of market regulatory policies, which resulted in predictability and controlled price fluctuations in the market.
The capacity of licensed warehouses realized a 2.2-fold increase
Licensed warehouses are the pillars of mercantile activity and food supply security. 163 licensed warehouses provided service in 41 provinces, 127 districts and 234 different locations with a storage capacity of 8.8 million tons by the end of 2022. Licensed warehouse storage capacity, which used to be 4 million tons when TMEX commenced operations, depicted a greater than 2-fold increase in 3 years, reaching a capacity to store one-fourth of Türkiye’s total grain harvest.
TMEX Grain Index, one among the TMEX Agricultural Commodity Indices, recorded an annual increase of 57%.
The base date of TMEX Agricultural Commodity Indices is April 1, 2021, and the base value is 1,000. The closing value of TMEX Grain Index, which is calculated on the prices of wheat, barley and corn EWR transactions, was 2,005 in 2021. It closed the year 2022 with a value of 3,150.60, with an increase of 57%. The annual changes in the Indices by commodity are given in the table below.
TMEX in 2023
Cooperation with the market participants will continue to be carried out to proliferate licensed warehousing and EWR trade in 2023. Cooperation will be carried in order to include additional commodities such as canola (rapeseed), olive oil, feta cheese, raisins, tea and sugar, to the 17 already present agricultural commodities in EWR Market.
The TMEX Research & Development Center aims to bring domestic and national mercantile exchange solutions in the agricultural market with the TMEX Trading System (TÜRİS) Technological Transformation Project. The first phase of the project, which was initiated in 2021, where Commodity Market Intermediary Institutions (UPAK) will intermediate trades, is planned to be completed in 2023. Subsequently, actions will be taken to open Futures Market. This infrastructure will be developed and put into use as the second phase of the Project. TMEX will continue working with stakeholders in the agriculture ecosystem in order to proliferate the use of licensed warehousing to strengthen sustainable food security. Furthermore, TMEX will continue working towards facilitating efficient market price formation to market participants. Finally, EWRs as a collateral will continue to play crucial role to ensure farmers have access to adequate financing.
Established in June 2018, TMEX is engaged in exchange operations for trading of electronic warehouse receipts and of futures contracts with an underlying of electronic warehouse receipts issued by licensed warehouse operators.
TMEX works in collaboration with the Union of Chambers and Commodity Exchanges of Türkiye (TOBB), T.R. Ministry of Trade, T.R. Ministry of Agriculture and Forest, T.R. Ministry of Treasury and Finance and other stakeholders for the digitalization of food supply chain from field to fork, expansion of the usage of EWRs, development of contract farming and licensed warehouse operations.