TÜRİB Aims To Bring Expertise Into Agriculture
TÜRİB aims and works for having a market where the values of agricultural products are determined effectively and allowing to get the food at the most afforable prices.
Turkish Mercantile Exchange (TÜRİB) aims and works to determine the values of agricultural products in an effective market and allow access to food at the most affordable prices. And we talked to Necla İ. Küçükçolak, PhD, Executive Vice President at TÜRİB about the whole story of the institution, its working principles, and future goals.
COULD YOU TELL US ABOUT THE ESTABLISHMENT STORY OF THE TURKISH MERCANTILE EXCHANGE (TÜRİB)? WHAT ARE YOUR SERVICE AREAS? DO YOU HAVE SHORT- OR LONG-TERM NEW PLANS TO IMPLEMENT?
Our Exchange was established to determine the fair values of agricultural products by bringing together producers and consumers of agriculture and to allow access to food at the most affordable prices. And the spot transaction platform was launched on 26.07.2019 with that goal. In the Electronic Product Bond (ELÜS) Market, they can be transacted in an environment of trust, free competition, stability, transparency, and convenience. And our Exchange provides significant benefits such as effective price formation, reduction in transaction costs, expertise, and knowledge in the agricultural field. And we aim to expand our product range and the market participant base in the upcoming period. And we continue our activities to be an integrated trading platform with international systems in the long term.
TÜRİB ALSO CONDUCTS LICENSED WAREHOUSING AND PRODUCT EXPERTISE ACTIVITIES. HOW COULD YOU EXPLAIN THESE CONCEPTS? WHAT ARE THEIR FUNCTIONS IN THE WORLD OF MERCANTILE EXCHANGE?
Licensed warehousing is a system that allows agricultural products that can be preserved for long times in healthy environments with modern infrastructures. Licensed warehouses operate under the surveillance and supervision of T.R. Ministry of Trade. Authorised classifiers serving these warehouses ensure that products are classified and stored in accordance with the standards set by the T.R. Ministry of Trade. And ELÜS is issued for agricultural products kept in the warehouses. In this context, the journey of agricultural products starts with the harvest by our farmers. Then the product can be sold after the harvest. If growers are not happy with the market prices at the time of the harvest, they can place their products in our licensed warehouses and processed at a later date in suitable market conditions. ELÜS is a dematerialised bond that represents the ownership of the products kept in licensed warehouses. They get dematerialised via the Central Securities Depository (MKK) that operates in the capital markets and monitored on the basis of beneficiaries.
SO, ELÜS IS ANOTHER CONCEPT THAT STANDS OUT IN MERCANTILE EXCHANGE, MEANING ELECTRONIC PRODUCT BOND. WHAT ARE THE ADVANTAGES OF THIS BOND? HOW AND FOR WHICH PRODUCTS CAN IT BE USED?
ELÜSs receive incentives from the T.R. Ministry of Agriculture and Forestry. They include transportation, analysis, and leasing support. Earnings from ELÜS trades in our Exchange have been exempted from income and corporate tax until 31.12.2023. We also have tax advantages such as agricultural income tax withholding, stamp tax, and VAT exemption. Besides, there is also an interest-free loan opportunity provided to our farmers by T.R. Ziraat Bank and Agricultural Credit Cooperatives. As for the products that can be transacted in our Exchange, we can talk about pistachio, hazelnut, grains, legumes, oily seed, dried apricot, dried grape, cotton, olive, olive oil, and dairy products.
WHAT ARE THE STAGES THAT SHOULD BE FOLLOWED WHEN SOMEONE WANTS TO OPEN AN ACCOUNT AND BECOME AN INVESTOR IN TÜRİB? IS THERE A PRE-REQUISITE FOR THE ACCEPTANCE OF THE INVESTOR?
Investors need to contact Trade Exchanges, who are our agents, in order to trade on our Exchange. Agency contact information and registration process can be found on https://www.turib.com.tr And we seek no pre-requisite to accept investors. After they complete their registration, they can do their transactions on the TÜRİB ELÜS Transaction Platform (https://platform.turib. com.tr) with the username and password information that we will send to their phone numbers.
TÜRİB WORKS IN COOPERATION WITH MANY SHAREHOLDER INSTITUTIONS. ARE THERE PARTICIPATION BANKS AMONG THEM?
As you mentioned, we are in close cooperation with industry shareholders such as the Turkish Grain Board, Turkish Sugar Refineries Corporation, and Agricultural Credit Cooperatives. In addition, financial institutions, Takasbank, and MKK are also involved in the execution and clearing of transactions on our Exchange. Since ELÜS can be used as loan collateral as well as being traded on our Stock Exchange, we also work with participation banks that provide ELÜS clearing and custody services and accept the said bond as collateral.
CAN TÜRİB OFFER SERVICES THAT CAN SUBSTITUTE FOR THE ACTIVITIES OF THE PARTICIPATION BANKS IN THE LONDON METAL EXCHANGE FOR BANKS BOTH IN TURKEY AND ABROAD?
We are working in close cooperation with the Participation Banks Association of Turkey and its members in the context of replacing tawarruq transactions in foreign markets to ELÜS trade. In local markets, we aim to implement transactions in accordance with participation finance principles in 2021.
Interview: Gültuğ Erdöl