Aniseed prices surge 70 percent

Turkey’s rakı market has become drunk on aniseed prices rising 70 percent.

The price skirmish of Mey İçki, a Turkish alcoholic beverages firm, with producers and the rise in demand with the new players in the rakı sector as well as the decline in the planted amount in recent years have blown aniseed prices sky high. The rise in the price of aniseed, which has 50 percent share in rakı producers’ costs together with grape, may mean a price hike for alcohol consumers. Meanwhile, farmers are expected to orient toward aniseed rather than products such as corn and triple the planted amount.

Aniseed prices have surged because producers and merchants are resisting the price proposed by Mey İçki, which purchased a substantial proportion of Turkey’s aniseed production. The firm proposed 4,250 Turkish liras for a ton of product for 2009. Aniseed, which had reached a peak at 8-8.5 liras per kilogram in January 2009, climbed to 14 liras in January 2010.

The additional demand from the new producer firms that emerged following the rakı production permits granted to the private sector, are also cited among the reasons for the rapid rise in aniseed prices. The drop in aniseed production from around 25,000 tons in 1998 to 6,000-8,000 tons is also regarded among the reasons of the fluctuating prices. 

Problems in export markets

Commenting on the rise of aniseed prices, Nejat Iblar from the İzmir Mercantile Exchange, said farmers have reacted to Mey İçki’s pricing policy in 2009, linking this to the recent aniseed prices. Mey announced aniseed purchase price at 4.25 liras in August 2009 and it would not make concessions, said Iblar. “Mey acted rather severe in its pricing policy. When Mey announced this price, the product was trading on the bourse at 6 liras. Reacting to Mey’s price, producers did not sell their products. Then being obliged to purchase product, the firm was involved in a high amount of purchases, causing a sudden surge in the price of the product. The price of the product trading between 6 to 8 liras climbed to 14 liras.”

Noting that Turkey’s total aniseed production ranges between 6,000 to 8,000 tons, Iblar said Mey purchases around 4,000 tons. The price increase has been of use to rival countries, Iblar also said. “Apart from us, Syria is also an important producer. With the rise of our prices, Syria enters and Turkey loses. While our price is 14,000 liras per ton, the price of aniseed is around $7,000 in Syria. But product quality is not the same with ours.”

Gökay Tekin, chairman of the Burdur Chamber of Agriculture, said the rise in aniseed price is related to the rise in rakı producers. There are not enough products to meet the demand at present, Tekin said, adding that Mey’s effort to keep the price low also had an impact on this rise. However, producers do not earn money from price increases, Tekin said, adding that producers delivered the product to merchants long before the hike. “This year, more plantation area has been allocated due to high prices. This is another threat. It is not possible for producers to earn money as long as there is no price stability. There is no guarantee to see the same prices next year. This situation may damage the producers. Moreover, there is also a serious rise in seed prices. The producers have a hard time finding seeds for a proper price.”

Meanwhile, Egemen Demirtaş, chief executive officer of Efe Rakı, said it is not possible to tolerate this rise in aniseed prices. “It seems to me that the rise is speculative. A very high rise was experienced. It is difficult to produce rakı with these prices, because grape and aniseed constitute 50 percent of our costs. We are facing such a rise as we are trying to offer rakı to consumers at convenient prices.”