The polemic of this election: Where are the finances?
Mustafa Sönmez - Hürriyet Daily News, April/ 27 /2015 With six weeks left to…
Long lines of people waiting to buy cheap bread in the winter cold have become a common sight across Turkey in recent weeks as the price of the most indispensable of staples has soared, with more hikes looming down the road.
As in all Eastern nations, bread is a key food in Turkish cuisine, meaning that the prices of bread and baked products in general are always important for the populace. For low- and middle-income groups, bread and its price have become all the more important now that their purchasing power has melted amid the slump of the Turkish lira and surging inflation.
Turkey has come to rely on imported wheat to meet the domestic consumption of bread and baked products and sustain an exportation drive in the sector. Drought has further raised the need for imported wheat this year. Hence, a combined impact — the global increase in wheat prices and the depreciation of the lira — has fueled the string of price hikes in the sector.
Wheat importation has become a structural downside for Turkey amid shortfalls in domestic production. The government has been subsidizing wheat imports for years, keen on encouraging exports by flour producers. This policy appeared sustainable when hard currency prices rose at a reasonable pace, but not so since the price of the dollar exceeded 10 liras in November.
Turkey’s monthly consumer inflation is expected to hit a staggering 15% in December and bring the annual rate to at least 35%. The Turkish Statistical Institute (TUIK) is due to release the official figures Jan. 3.
The institute assigns a 26% weight to food in its monthly consumer inflation survey. Bread has a 2.5% share in that rate. With other baked products included, the share rises to 5%.