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USDA GAIN: Oilseeds, Cotton, Sugar, Grain and Feed


05 September 2012

USDA GAIN: Turkey Cotton and Products UpdateUSDA GAIN: Turkey Cotton and Products Update

The MY 2012 Turkish cotton crop is now projected at 400,000 hectares and 600,000 MT (2.7 million bales).
USDA GAIN Report - Oilseeds, Cotton, Sugar, Grain and Feed

Report Highlights:

High local temperatures, frequent electricity cuts and repeated insect attacks in the GAP region had adverse affects on yields. High domestic production in MY 2011 caused imports to decline to 465,000 MT (2.1million bales), down about thirty-two percent, during the first eleven months compared to a year ago. US exports were about 196,000 MT (0.9 million bales) during the same period. Availability of GSM-102 Credit Guarantee Program played an important role in U.S. exports to Turkey. Total registration reached US $156 million during FY 2012.

Production

High temperatures and frequent electricity cuts of irrigation has adversely affected the local cotton crop in the Southeast Anatolian region. Additionally, unlike last year, some bug damage was also reported in the Southeastern region. Accordingly, MY 2012 area and production are now estimated at about 400,000 hectares and 600,000 MT. Available information on planting area and production for MY 2011 indicate higher planting and yield, therefore total production for the year is now estimated at 490,000 hectares and 750,000 MT (3.4 million bales).

Consumption

MY 2011 domestic cotton consumption is expected to be 1.23 MMT (5.6 million bales). Despite all the bleak economic developments around the world, Turkish textile and garment exporters managed to increase exports in both categories during MY 2011 until the month of June. Higher cotton prices and production costs in China helped Turkish textile exporters to compete against Chinese products in the international markets and prevented declines in textile exports.

Experts indicate that economic problems in the main Turkish textile export market, the EU, and political problems in neighboring countries will eventually have an adverse affects on exports and the domestic economy. MY 2012 cotton consumption is now projected to remain about 1.2 MMT (5.5 million bales).

The sudden price increases in March 2010 and following drops in the world cotton prices hurt Turkish mills and encouraged them to utilize their own stocks and the abundance of local cotton. This caused local gins and farmers to hold on to their stocks rather than sell to textile mills, creating pressure on local prices.

Trade

Turkey’s imports of cotton During the first eleven months of MY 2011 Turkey imported 465,292MT (2.1 Million bales), which is a thirty-four percent decline compared to the same period last marketing year and is due to high local production. Although the US was the leading supplier with 195,889 MT (0.9 Million bales) its market share declined from the usual sixty percent to forty-two percent. Rapid fluctuations in the global cotton price during the last two seasons have caused millers to prefer small orders from domestic sources, or from sources near-by, such as Greece.

Marketing year-end imports are expected to remain at about 520,000 MT (2.3 million bales) compared to 730,000 MT (3.3Mmillion bales) last year. Cotton imports are expected to increase in MY 2012 to about 620,000 MT (2.8 million bales) due to a projected decrease in domestic production. During MY 2011 USA, Greece and the CIS countries were the traditional suppliers, but Brazil, Argentina and Australia are emerging as new cotton suppliers for Turkey. GSM-102 credit guarantee program continues to play a critical role in US cotton sales to Turkey.

During FY 2012 Turkish cotton importers registered US $156 million worth of US cotton under the program, which represents about twenty-four percent of Turkey’s total use of GSM-102 for the financial year. Turkish cotton exports during the same period were about 35,000 MT, up significantly compared to the last few years due to attractive local prices. 22,000 MT of this cotton went to the Mersin Free Trade Zone, which means that some of this cotton may be imported back in to the country. Turkey also exported about 27,000 MT of cotton for medical use in the same period.

September 2012

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