Turkey Emerging As Fifth Largest Cotton Exporter In 2023-24
Turkey is going to emerge as the fifth largest exporter as well as consumer of cotton in cotton marketing year 2023-24.
According to a latest United States Department of Agriculture (USDA) report, Turkish cotton exports have doubled in the past two years to the highest level in nearly 50 years.
This is mainly because domestic use has fallen to a five-year low, which is attributed to the February 2023 earthquake, domestic inflationary pressures and lower global demand for cotton products.
Turkey is forecast to export 1.3 million bales of cotton this year, in part driven by a tenfold year on year increase in shipments to China in the first five months of the ongoing marketing year.
Turkey’s competitive prices relative to other major cotton exporters have boosted shipments to China; which contrasts with being one of the more expensive suppliers last year.
“Turkish cotton exports to Bangladesh, Vietnam, and Indonesia have also risen dramatically due to competitive prices,” USDA observed in the report.
The expected rise in Turkish cotton exports is offset by a projected decline in domestic use. The fall in Turkey cotton use accompanies a lower volume of cotton apparel exports in marketing year 2022/23.
There was also a 15 percent decline in garment exports in the first five months of 2023-24 marketing year. The volume of cotton textile exports also fell in marketing year 2022-23 but has remained stable so far this season.
One factor pressuring consumption is last year’s earthquake in Southern Turkey which caused damage to regions accounting for approximately half of Turkey’s cotton yarn production.
Yarn producers reportedly needed 2-12 months for repairs before restarting production. Additionally, interest rates, labour costs, and input costs have been rising in Turkey, dampening its competitive edge.
In addition to constraints in the production of yarn, demand for cotton apparel exports from Turkey too has fallen.
Economic growth has stagnated in the European Union, the top market for Turkey cotton apparel exports, and consumers are spending less on apparel and other discretionary purchases.
The United Kingdom, another major export market for Turkey cotton apparel, entered a recession in the second half of 2023.
The increase in Turkey cotton exports this year may be an aberration due to competitive prices. Future shipments are expected to decline as Turkey cotton consumption and cotton apparel exports rebound.
