Mehmet Şimşek, Deputy Prime Minister in charge of the economy announced that the new product stock exchange, which will contribute to the reduction of food inflation and stabilize the market within price stability, will soon be operational.
In his assessment, Şimşek recalled that the decision of the council of ministers on the establishment of the "Turkey Product Specialized Stock Exchange Incorporated Company," which will allow agricultural products to be traded both physically and in the form of product notes, was published in April.
Şimşek said the stock market will be allowed to operate at the final stage after the legislative work on the operation of the market will be completed and the trading system will be made operational in coordination with the Capital Markets Board (CMB) and the Ministry of Customs and Trade.
Şimşek informed that the partners of the stock exchange, which will be headquartered in Ankara, will consist of the Union of Chambers and Commodity Exchanges of Turkey (TOBB), the Turkish Grain Board (TMO), 33 commodity exchanges, the Istanbul Stock Exchange, the Central Registry Agency (CRA), Takasbank, Ziraat Bank, Halk Bank and Vakıflar Bank.
Stressing that price stability will be achieved within the balance of supply and demand, Şimşek said that the legal and technical infrastructure related to licensed warehousing and electronic product notes, which will function for these purposes, has been completed.
Pointing out that 39 licensed warehouses operate in Turkey, Şimşek said electronic product notes currently trading in nine commodity exchanges are monitored by the CRA. "In the first stage, wheat and cotton, which constitute a large part of our country's agricultural production and product stock, are expected to be opened for transactions in the market. In the following period, products such as nuts, apricots, figs, olives and pistachio nuts will also be processed," Şimşek said.
Minister Şimşek said the stock market, which will prevent the periodic price fluctuations, will also eliminate imbalances between the field and the market price.
"With the operation of the stock market, the storage structure that will operate in connection with the electronic product notes will prevent the products from being stocked by intermediaries in an unhealthy manner and sold to consumers at high prices during periods of high supply," Büyükekşi continued. "Thanks to the healthy price formation to be realized in the competitive environment in the market, fluctuations in prices will be reduced to a minimum. This will also contribute to the targets of the Food Committee, which aims to ensure price stability in agricultural products."
In the meantime, price reductions caused by the supply accumulation of agricultural products in the harvesting periods will be prevented and the market will be stabilized within the price stability, Şimşek explained, underlining that since producers will not have to sell their products to limited number of merchants in their immediate surroundings, they will be able to benefit from the competition that will be created by a large number of buyers.
Stating that with the said exchange Turkey will become the commercial hub of the agricultural products in the region, Şimşek said an alternative investment tool will also emerge for investors in this regard.