Republic of Turkey

MINISTRY of TRADE

General Information About Licenced Warehousing And Specialized Product Exchanging System


 
GENERAL INFORMATION ABOUT LICENCED WAREHOUSING AND SPECIALIZED PRODUCT EXCHANGING SYSTEM
 
Licensed warehousing and specialized product exchanging is a system for the trading of agricultural products which can be standardized and can be stored long-term such as cereals, pulses, oilseeds, cotton, nuts, olives, olive oil, dried apricots, pistachio. In this system, agricultural products are classify and these quality determine by authorized classifıers, then these products stored in licensed warehouses with modern infrastructure. Trade of these products are made by product receipt representing ownership of these products in Specialized Product Exchanging.
 
Legal regulation about this system is published by Law No 5300 and named “Agricultural Products Lıcensed Warehousıng Law”. Four legislation and six product communique have been published based on this law.

Legislative Studies in Licensed Warehousing

Finally, thanks to the communique of pistachio licensed warehouse, the mentioned product was also included in the system. In the direction of requests from the sector, dried grapes licensed warehouse communique preparation studies are continuing and will be put into force in the coming period. And also we continue to publicity the system in order to increase the product range stored in licensed warehouses.
 
The Main Benefits of the System
 
With the development and expansion of warehousing system in our country, it is expected that this systems provide significant benefits for all actors that trade in agricultural products.
 
Thanks to system producers have access to safe and insured warehouse to store their agricultural products and they don’t have to sell their products in the period of low prices. Producers can store their product for a while and then they can sell their product after harvest period when price increase. Also this system ensure balance of supply and demand product and so supply period spread through the entire year.
 
Trade and industry enterprises which based on agricultural can bu use these systems for their products so they get ride of cost of building of storage. They will reach a wide variety of agricultural products with easly and reliably thanks to licenced warehouses.
 
As part of licenced warehousing and specialized product exchange system, a new collateral has been offered to the agricultural sector thanks to product receipt representing products stored in licensed warehouses which is owned by the people who are engaged in agricultural activities.
 
Thanks to authorized classifiers, quality and criteria of products can be determined correctly. In this system, prices of product can be determined in the Specialized Product Exchange with lots of buyer and seller.  It is expected that Specialized Product Exchange will bring together a large number of buyers and sellers. So producer have the opportunity to sell their products all over the country.
 
Current State in the System
 
This system has been started in 2011 when first company get licenced from our Ministry in Polatlı with 40 000 tonnes of grain warehouses.
 
The system has maintained its dissemination and development. As of today, 41 companies have been established and 17 of these companies operate with 785 000 tons of grain capacity, 15 000 tons of cotton capacity and 5 000 tons of olive capacity. In case of all companies have official authorization to operate, capacity will reach 5.086.300 tons.
 
11 laboratories have been authorized to analyze agricultural products, determine the quality and characteristics of the products, and also 4 reference authorized classifier have been authorized to check and inspection of the authorized classifiers.
 
Due to Specialized Product Exchange has not established yet, product receipt has been trading in commodity exchange. In this system all transactions relating to product receipt are held in electronic platform.
 
Establishment of Licenced Warehousing Company

As mentioned, establishment, operation and inspection of the licensed warehousing system operations are carried out under Law No. 5300 Agricultural Products Licensed Warehousing Law.

Licensed warehousing company should be established as an incorporated company with the permission granted by the Ministry while taking the economic necessity and activity conditions.

The company must have a paid capital which is determined by the Ministry in accordance with the storage capacity and which is worth at least one million liras upon its establishment and the condition to submit the documents stated in the relevant regulation shall be required as well. It shall be obligatory to draw up the master contracts and carry out the establishment operations of these companies in compliance with this Law and other relevant legislation.

The official authorization shall be given to the company which has received the establishment permission, only in the event that it is determined that it meets the conditions foreseen by this Law. The company shall not accept products and prepare product instruments until it receives the official authorization.

Opening branches and changing the scope of the license of the agricultural products licensed warehouse operator shall be subject to the permission of the Ministry as well.

The companies who apply for a license shall be obliged to give a licensed store guarantee which is worth at least 15% of the current product market value of the capacity of the store and which is accepted by the Ministry. Also the companies be obliged, as a condition of license, to insure the facilities and the products he stores within the scope of licensed store activity against the risks stated in the regulation.

Lastly, those who have served a time in prison for five years or more for deliberately committing a crime or for crimes against the security of the state, crimes committed against constitutional order or the operation of this order, embezzlement, corruption, bribery, theft, fraud, forgery, breach of confidence, fraudulent bankruptcy, bid rigging, rigging the performance of deeds, laundering the assets arising from crime, smuggling or tax evasion, cannot operate licensed stores, cannot be partners to them, and cannot act as their manager or supervisors.

Support for Licenced Warehousing Fee

In order to encourage the licensed warehousing system and ensure development of the system, part of the rental fee is paid to owners of the products by the government.

3 Turkish liras per ton are paid for wheat, barley, rye, oats, maize, rice, rice, lentil, chickpeas, beans, peas and sunflower; 7 Turkish liras per ton are paid for cotton which are kept in licensed warehouses and for the others products is paid up to fifty percent (not exceed 10 Turkish liras) of the tariff. In this context, so far nearly 12 million Turkish liras subsidies have been paid.
 
 
 Related Department:  The Department of Agricultural Products Trade/ Directorate General of Domestic Trade