Opinion

Poppy Seed from Turkey: Government Regulations and Price Swings

Poppy Seed
India
Turkiye
Published Oct 8, 2019
In July 2018, the Indian government imposed a ban on Turkish poppy seeds to protect and support the Indian poppy seed industry. However, in the last week of September 2019, the Indian government lifted the import ban on Turkey to mitigate the supply shortage and rising poppy seed prices.

The main export destination for Turkish poppy seeds is India. In 2018, India accounted for approximately 70% of Turkey’s poppy seed exports. Specifically, for white poppy seeds, India imported 80% of Turkey’s exports according to Turkey Dalal Co., a Turkish poppy seed brokerage.

In July 2018, however, the Indian government imposed a ban on Turkish poppy seeds to protect and support the Indian poppy seed industry. When the Turkish poppy seeds reach the Indian market, the price of domestic poppy seeds decreases significantly. The ban on Turkish poppy seeds did lead to an increase in the price of domestic poppy seeds in India, as the ban created a shortage. However, the Indian production volume did not increase, as the Indian government needs permission from the International Narcotics Commission Board (INCB) in Vienna to increase the harvest area of poppy seeds. Poppy seed is a byproduct of Papaver somniferum, which is a plant that is also used to make the drug opium. Since the current global demand for opium is stable, the Indian government is unlikely to get approval from the INCB to increase the production of Papaver somniferum, and thus of poppy seeds, Abdul Haq Khalifa from Turkey Dalal Co.

In the last week of September 2019, the Indian government lifted the import ban on Turkish poppy seeds to mitigate the domestic supply shortage. Although Turkish poppy seed exporters and their agents, such as Turkey Dalal Co., can now export to India, the Indian government set an import quota of 18K tons. Currently, Turkey has 26K tons of white poppy seeds available for export to India: 18K tons from the 2018/19 crop and additional 8K tons from 2019/20 crop, which was harvested in July 2019.

From July 2018 to September 2019, the poppy seed price in India was highly volatile, mainly due to Indian government regulations and the speculations of Indian importers. Indian importers often anticipate government regulations on poppy seed imports and purchase their stocks accordingly. Because poppy seeds can be stored for a long duration, importers often purchase large stocks and hold them until the price increases, creating wide price swings. During the past year, the price of poppy seeds in India ranged from 2,500 USD per ton to 4,200 USD per ton. Since the import ban on Turkish poppy seeds has been lifted, the price is expected to be less volatile during the 2019/20 season.

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