Published in the Official Gazette dated 28/06/2002, No. 24799 

Regulation on Raw Material and Sugar Prices 

FIRST PART 

Purpose, Coverage, Legal Basis and Definitions 

Purpose and Coverage

Article 1- The purpose of this Regulation is to lay down the principles and procedures related with procurement and pricing of sugar raw material and determination of sugar price. 

Provisions of this Regulation cover the real and legal persons operating sugar factories according to the Sugar Law no. 4634. 

Legal Basis

Article 2- This Regulation has been prepared on the basis of article 12 of the Sugar Law dated 4/4/2001 and numbered 4634. 

Definitions

Article 3- The following terms appearing in this Regulation have the following meanings in the application of this Regulation: 

a) Undersecretariat: The Undersecretariat of Foreign Trade, 

b) Authority: The Sugar Authority, 

c) Board: The Sugar Board, 

d) Sugar: Crystallized saccharose that is classified as white sugar (standard, refined cube and crystalline sugar), semi-white sugar, refined sugar, raw sugar and brown sugar and that is produced from sugar beet or sugar cane, and starch-based isoglucose, glucose syrup liquid or dried state, sugar solution and invert sugar syrup composed of dissolving of saccharose or invert sugar or both in the water, and inulin syrup, 

e) Marketing year: The period between 1 September and 31 August,  

f) Quota A: The quantity of sugar which is produced according to domestic demand and which can be delivered to the domestic market within the marketing year, 

g) Quota B: The quantity of sugar which corresponds to a certain percentage of the quota A and which is produced in order to be kept for safety purposes, 

h) Sugar C: The raw and white sugar which is produced outside the quotas A and B and which may not be marketed in the domestic market and which is procured in order to be processed for exportation,  

ý) Sugar factory: An undertaking which produces sugar by processing the products defined in paragraph (d) and raw sugar, excluding those undertakings using sugar as an input, 

j) Company: A legal personality which has, and / or operates, one or more sugar factories. 

k) Raw material: The main input used in sugar production, 

l) Processed product: The finished product contains processed sugar as an input in its body, 

m) Manufacturer-Exporter: A firm producing and exporting processed product, 

n) Contract: A contract for growing raw material, 

o) Representative of producers: A local cooperative of raw material (beet, corn), 

p) Polarization: Polar sugar percentage found on the basis of rotation of the plane of polarized light by a sugary product, by assuming as 100 the optical rotation at 198 Hg (mercury) isotope green light wavelength (546.2271 nm), 20°C and 200.000 mm tube length of the solution obtained by dissolving 26.000 gr pure saccharose weighed with brass weight under normal conditions (1013 mbar pressure, 20°C, 50% relative humidity) with distilled water at 20°C and making it up to 100 ml. 

r) Wastage: Ratio of the difference between the weight of beet taken delivery of and the weight of beet paid for to the weight of beet taken delivery of, expressed as a percentage. 

SECOND PART 

Procurement of Raw Materials, Prices of Raw Material and Sugar 

Procurement of Raw Material

Article 4- A contract is made between the real and legal persons operating a sugar factory and producers and/or their representatives in order to procure the raw material required for guaranteeing the sugar quotas determined and allocated to Companies by the Board. The contract contains provisions on prices and quantity of raw material, production conditions, rotation, seed, sowing and crop protection, delivery and purchase conditions, determination of wastage, raw material transportations, agricultural supports, by products, payments of prices, technical and penal conditions and settlement of disputes.  

The contract states the advance price determined and the net quota A and B raw material quantity to be produced by each producer. The contract provides that the quota quantities stated in the contract can be sold only to the buyer and that the buyer is obliged to purchase the same in accordance with the contract. When determining the quotas A and B to be stated in the contract, those portions of the quotas A and B determined by the Board on the basis of Companies, which correspond to producers or groups of producers shall be taken as basis.

The beet produced and delivered outside the quotas A and B, on the other hand, is accepted as beet C. Whether the beet for sugar C is to be purchased or not depends on agreement between the real and legal persons producing sugar and producers and/or representatives of producers. 

The contract states the place of production and the quality standards to be determined by the buyer. By taking into consideration the rotation plan applicable to production of sugar beet, it shall be stated that those beets produced outside the rotation field will not be purchased, and that the product to be delivered may not be defective, fraudulent, deteriorated, rotten, diseased or mixed with other products that will affect the commercial value of the same and that do not conform to the standards stated in the contract. 

The contract shall provide that the Company shall determine and procure the variety of the seed to be used in production and state the principles related with pricing of the seed and manner of sowing and crop protection. 

The contract states the principles related with the starting and ending dates of purchases and the purchasing center where the raw material will be taken delivery of. The contract shall state which party shall bear the cost of transporting the raw material to the purchasing center and how it will be determined. Force majeure and principles of application thereof shall be determined. The contract shall state the sanctions to be applied in case the quantity of the raw material delivered is less than the quantity of the quotas A and B whose production has been undertaken, for reasons other than force majeure. The contract shall also lay down the principles and procedures related with determination of wastage in the raw material delivered by producers at the purchasing center and contain provisions allowing presence of an observer representing the producers during determination of the wastage. 

The contract shall state the quantity, time and manner of the supports in kind and in cash. Principles concerning distribution of by products are included if so requested by producers. The contract shall contain provisions concerning the manner and time of the payments of price of the raw material and the obligations to be assumed by the Company in case of a delay in the same. 

A “Technical Conditions” booklet shall be prepared as an annex to be contract. Said booklet shall contain such matters as field preparation, fertilizing, sowing, maintenance, irrigation, plant health, harvesting etc. 

The contract shall also state the penal conditions to be applied in case of failure to comply with the contract, and the courts authorized to settle all disputes and lawsuits between the parties. 

Determination of Price of Raw Material

Article 5- Sugar beet prices are determined every year according to the agreement to be reached between the real and legal persons operating a sugar factory and the producers and/or representatives of the producers, by taking into consideration the annual inflation rate, the increase in producer costs and the world sugar prices. The beet advance price is announced prior to contract-making and sowing. The contract states the date when the advance price and the final price will be determined. 

The quota A and B sugar beet buying prices are determined separately, as the price of the beet which contains 16% polar sugar with 1 kg of wastage having been deducted. The price to be offered according to quality for each polarization degree surplus or shortage in polar sugar content being above and below 16% shall be determined according to the agreement to be reached between the real and legal persons operating a sugar factory and the producers and/or the representatives of the producers. 

The quota B sugar beet buying price is determined at a level which is 10-30% below the quota A sugar beet buying price, according to regional characteristics. 

The contract shall contain provisions allowing presence of an observer representing the producers during sampling and analysis for determining the polarization value to be taken as basis for the price.  

The beet C prices corresponding to sugar C, on the other hand, are determined by real and legal persons operating a sugar factory according to the price that will form from exportation of sugar C, under the supervision of the observer of the producer. 

If sugar is transferred from quota B to quota A in mandatory cases pursuant to article 4 of the Sugar Law no. 4634 within the marketing year, the price of the quota B beet corresponding to the transferred sugar shall be assumed to be the price of quota A beet, and the difference in between shall be paid to all producers within the marketing year on the basis of their quota A prices. 

The raw materials other than beet shall be procured firstly according to the contract to be concluded between producers and Companies. In contracted production, the principles and procedures relating to growing of raw materials shall be determined separately. In case the quantity of raw material foreseen to be procured under the contract proves insufficient, it will be procured from the market. 

In case of failure to reach an agreement between the representatives of the producers and the company on the price of raw material, the Board may cause an arbitral tribunal to be formed upon request of any of the parties. 

Sugar Prices

Article 6- The sugar selling prices are determined freely by the real and legal persons operating sugar factories. Costs, world exchange prices, domestic prices, supply-demand balance, speculative effects and other relevant matters are taken into consideration when determining the prices. 

The real and legal persons marketing the sugar C shall submit to the Board certified copies of the licenses/permissions and other documents they have obtained under the Export Regime. 

The Companies shall notify the Board in writing at the end of every month of the quantities of sugar produced at the factories and sold within the country under the quota A, and the sugar C exports to be made, and the deliveries made to the local manufacturers/exporters of finished products, and their stocks. 

The Companies shall notify the Board of their weighted average selling prices for every month, broken down by types of sugar, within the first five days of the following month. 

Sugar Exports and Imports

Article 7-The Board shall notify the Undersecretariat of its opinion about the arrangements requested to be made in sugar trading, by taking into consideration the world exchange prices, domestic prices, supply-demand balance, speculative effects and other relevant matters. 

The foreign-sourced sugar used within the country as raw material or auxiliary material by manufacturers-exporters within the framework of domestic processing regime and/or similar applications fall into the coverage of the sugar C and may not be marketed within the country directly or as processed product. The Board shall notify the Undersecretariat of its opinion about the sugar to be imported under this coverage. 

THIRD PART  

Responsibility and Supervision 

Responsibility

Article 8- The Authority may, when fulfilling the duties entrusted to it under the Law, request all kinds of information it deems necessary from the public associations and establishments and from the real and legal persons that produce, market, sell goods and services in the market and from all kinds of unions thereof. 

The Companies are obliged to comply strictly with the Regulations and decisions of the Authority as they are. They are obliged to furnish the Authority with information on their campaign periods, production, sales, stock activities and other information requested by the Board under the Law, in the required format, in monthly periods. 

Supervision

Article 9- The Authority may carry out investigation and supervision at the companies and their factories in connection with matters relating to its duties. To this end, the Authority may make use of relevant associations, establishments and persons when necessary. 

Effectiveness

Article 10- This Regulation enters into force on the date of its promulgation. 

Execution

Article 11- Provisions of this Regulation are executed by the Sugar Board.