Required Report - public distribution

**Date:** 4/12/2005

**GAIN Report Number:** TU5014

TU5014

**Turkey**

**Dried Fruit**

**Annual Report**

**2005**

**Approved by:**

![](media/image1.wmf)Jim Higgiston, Agriculture Counselor

U.S. Embassy

**Prepared by:**

Unal Sarigedik, Agriculture Specialist

**Report Highlights:**

Turkey had record high raisin production in MY 2004. The projection for
the MY 2005 crop is also good although less than MY 2004 since the
growing conditions have been favorable so far.

Includes PSD Changes: Yes

Includes Trade Matrix: Yes

Annual Report

Ankara \[TU1\]

\[TU\]

Table of Contents

[**Executive Summary 3**](#executive-summary)

[Production 4](#production)

[Consumption 4](#consumption)

[Trade 5](#trade)

[Stocks 6](#stocks)

[Policy 6](#policy)

[Production 6](#production-1)

[Trade 6](#trade-1)

[Marketing 6](#marketing)

[Statistical Tables 7](#statistical-tables)

[PSD Table for Raisins 7](#psd-table-for-raisins)

[Export Trade Matrix for Raisins 8](#export-trade-matrix-for-raisins)

[Import Trade Matrix for Raisins 8](#import-trade-matrix-for-raisins)

# Executive Summary

Turkish raisin production is expected to decrease to 250,000 MT in MY
2005 compared to the revised level of 280,000 MT in MY 2004, as long as
weather conditions remain favorable during the remainder of the growing
and drying seasons. The decrease is due primarily to the exceptionally
large production in recent years, which stressed orchards. Production in
MY 2004 was revised upward due to better than expected yields. Raisin
orchard area is projected to remain about the same in MY 2005 compared
to with MY 2004. TARIS is expected to announce the MY 2005 raisin
procurement price in September 2005.

Domestic raisin consumption is projected at about 30,000 MT in MY 2005,
similar to MY 2004. Raisin prices at the Izmir Commodity exchange were
around YTL 1.00 (or about USD 0.74) per kilogram for standard #9 raisins
on April 7, 2004.

TARIS, a State Economic Enterprises (SEE) played a more significant role
in the past in the raisin market. Still, it plays a major role in
Turkey. This past year it procured about 70,000 MT of raisins and
exported about 22,000 MT thus far in MY 2004 (September 2004-March 2005)
although exports may reach 30 TMT once final figures are available for
the entire marketing year. Turkey is projected to export a slightly
larger quantity of raisins in MY 2005 parallel to a projected slight
increase in production. Exports in MY 2004 are still estimated at
220,000 MT.

Export prices currently are slightly lower (around USD 1,030 per MT) in
MY 2004 compared (USD 1,100 per MT) to MY 2003 for standard #9 quality.
These prices might be slightly higher or lower depending upon the grade
(A, B or C).

TARIS was estimated to have about 20,000 MT of raisins in stocks in the
beginning of MY 2004. Total carryover stocks are estimated to increase
at the end of MY 2004 due to estimated increase in supply.

Parallel to the commitment made to the IMF, the GOT eliminated most
input subsidy programs and adopted a direct income support system for
farmers. Compared to most other agricultural State Economic Enterprises
(SEE's), TARIS appears to be in a comparatively good financial position
to meet its financial needs, particularly the raisin division, which
usually earns a profit.

There is no export subsidy for raisins. In order to protect local
producers, the Turkish government announced a 54.9 percent import duty
for raisins of all origins based on CIF value in 2005. The bound import
duty rate on raisins is also 54.9 percent.

Currently USD 1.00 is around YTL 1.36 or TL 1,360,000.

# Production

Weather conditions have been good thus far in MY 2004 for raisin
production, even though there is a possibility of a frost in growing
areas until April 23. Raisin production is projected at 250,000 MT in MY
2005, if the weather conditions continue to be favorable during the
growing and drying seasons. This quantity is about eleven percent less
than 2002 estimates. The lower projection in MY 2005 is attributed to
excess production in MY 2004, which may have caused some stress on
orchards.

Turkish MY 2004 crop raisin production estimates range widely, from 250
TMT to 300 TMT. PSD estimates for MY 2004 are revised upward to 280,000
MT, which is a record high. Final estimates will be available later in
2005. Total raisin area in MY 2004 was revised slightly upward according
to industry sources.

Grapes are grown throughout Turkey. Seedless grapes---virtually all of
which are "Vitis viniserae L." the same genus and species as Thompson
seedless grapes, however, constitute about one-third of the total grape
crop and are grown only in Turkey's Aegean Region. In general, around 10
to 15 percent of the seedless grape crop is consumed fresh and/or
exported as fresh with the remainder going to raisin production. In MY
2004, total seedless grape production is estimated at about 1.4 MMT.
Using an average conversion ratio of about 4.5 to 1, raisin production
was 280,000 MT in MY 2003.

Seedless grape production expanded significantly in Turkey in the 1990's
due to more intensive cultivation and better irrigation techniques. The
Union for Agricultural Sales Cooperatives (TARIS) has recommended in
recent years that producers limit seedless grape orchard area because it
believed the export market was saturated. Seedless grapes generally are
grown on small farms averaging about 1.3 hectares. It is estimated that
nearly 65,000 growers produce seedless grapes in Turkey. About half of
all raisin producers are members of TARIS. Each year TARIS announces a
procurement price for raisins, which also serves as a support price.
TARIS is required to buy raisins from its members but members are free
to sell to other buyers and they often do. In general TARIS buys around
15-20 percent of total production.

The industry improved the quality of Turkish raisins through better
sanitation methods during the 1990's. Improvements were made through
using trellises, small plastic harvest crates, and concrete drying beds.
Most of these improvements had been financed by private processors and
much of the capital was derived from higher export prices obtained as a
result of the EU's minimum import price system which is no longer in
effect.

In general, Turkish raisins are lighter in color and rounder than
California raisins. The color difference is due to the fact that a
dipping solution is used to speed up the drying since the drying season
is short. However, Turkish producers have started to produce Thompson
type raisins by drying them without using this dipping method. Since MY
2000 TARIS is buying only standard #8 or better quality raisins.

# Consumption

Domestic raisin consumption fluctuates depending upon supply and quality
of the raisin crop. Raki, which is a hard Turkish alcoholic drink, is
made with low quality raisins for distillation purposes. Raki production
was privatized last year. In MY 2005, Turkish domestic consumption,
unchanged from MY 2004, is estimated at about 30,000 MT, most of which
is used for confectionary purposes and the remaining part for producing
raki. Raki producers generally consume 70,000 MT of fresh or dried
grapes, including raisins. The mix between fresh and dried grapes
changes with the price and availability of lower quality raisins. There
are numerous firms in the dried fruit processing and export business in
Turkey; however, the top ten firms are estimated to control about 85
percent of the raisin market.

TARIS's role in procuring and marketing raisins has been decreasing in
conjunction with IMF backed reforms to reduce the Turkish government's
role in agriculture. In general, TARIS has been the buyer of last
resort, purchasing a large percentage of lower quality raisins. The
quantity of raisins TARIS procured has varied a lot from as low as 9,000
MT to as high as 75,000 MT during the last ten years due to varying
production and quality. However, TARIS procured larger quantities in
recent years due to larger supply. TARIS procured 70,505 MT of raisins
in MY 2004, including 3,622 MT of Thompson type and 60 MT of organic
raisins and paid a total of about YTL 83 million (about USD 61 million).
Most of the quantity TARIS bought (about 60,000 MT) was standard #8 and
standard #9. TARIS procured about 40,000 MT in MY 2003, 23,000 MT in MY
2002 and 45,000 MT in MY 2001.

TARIS normally announces its procurement price at the beginning of the
marketing year. TARIS is expected to announce the MY 2005 procurement
price in September 2005. However, TARIS did not announce a procurement
price in MY 2004. Instead, it announced an advance price of YTL 1.00 for
all standards. After the procurement was completed TARIS paid the
difference. TARIS paid YTL 1.11 per kilogram of standard #8, YTL 1.19
per kilogram of standard #9, YTL 1.29 per kilogram of standard #10, and
YTL 1.40 per kilogram of standard #11. TARIS paid YTL 1.60 per kilogram
of Thompson type raisins. TARIS also paid a 20 percent premium for all
standards of organic raisins. These prices were lower than TARIS paid a
year ago since the base procurement price was YTL 1.40 (TL 1,400,000)
per kilogram for standard #9 quality of raisins at the beginning of MY
2003. The quality of the MY 2004 crop was good, about 20 percent was
standard #10, about 65 percent Standard #9, and 15 percent was standard
#8. The quality a year ago was slightly lower, about 75 % was standard
#9 or better and 25 percent was standard #8.

The TEKEL's liquor production was privatized at the beginning of 2004.
The practice on consumption of raisins versus fresh grapes might be
changed as a result. The exact quantity of raisins being used for raki
production is not known. Industry sources estimate that privatized raki
producers procured a few thousand metric tons with a price around YTL
0.70 per kilogram.

The Izmir Commodity Exchange is the main cash market for raisins. On
April 7, spot prices at the Exchange were around YTL 1.00 (about USD
0.74) per kilogram for standard #9. On the same day, private companies
bought a total of 65 MT but TARIS did not sell any.

# Trade

MY 2005 raisin exports are projected at 230,000 MT, which is about five
percent higher than the estimate in MY 2004, because of larger supply.
The EU is the primary market for Turkish raisin exports.

MY 2004 raisin exports are still estimated at 220,000 MT. According to
Aegean Exporters Union data, Turkey exported about 152,000 MT of raisins
between September 1, 2004 and March 16, 2005 compared to about 123,000
MT during the same period a year ago. So far in MY 2004, TARIS has
exported about 20,000 MT and projects that exports may reach 30,000 MT
by the end of the marketing year. In MY 2003, TARIS exported about
26,000 MT.

Average export prices were lower (about USD 1,050 per MT) for the period
September 1, 2004 and March 16, 2005 compared to the same period a year
ago (about USD 1,150 per MT). Export prices currently are around USD
1030 per MT for standard #9 quality. These prices (all prices are FOB
Izmir) might be slightly higher or lower depending upon the grade (A, B
or C).

Export Trade Matrix represents the unofficial data received from the
Aegean Exporters Union while Import Trade Matrix represents official
data for the corresponding years.

# Stocks

Official information on raisin stocks is not available. TARIS was
estimated to have about 20,000 MT of raisins in stocks in the beginning
of MY 2004. Carryover stocks are estimated to increase at the end of MY
2004 due to an expected increase in supply. Carryover stocks at the end
of MY 2005 are projected to be slightly lower than the previous year.

# Policy

## Production

All Agricultural State Economic Enterprises (SEE's), including TARIS,
were given autonomy by the GOT as a part of the economic reforms
legislation, which was adopted in 2000. As a result of this change, the
director generals of SEE's, which used to be appointed by the GOT, are
now elected. The GOT made a commitment with the IMF to reduce budget
deficits, again as part of its economic reform. At the same time, the
GOT eliminated most of the input subsidy programs and adopted a direct
income support program for farmers. This policy change decreases the
financial burden of the SEE's as well. Compared to most other
agricultural SEE's, TARIS appears to be in a comparatively good position
to meet its financial needs, particularly the raisin division, which
usually earns a profit.

## Trade

There has never been any export subsidy for raisins. In order to protect
local producers, the GOT announced a 54.9 percent import duty, which was
the same last year, for raisins of all origins based on CIF value in
2005.

# Marketing

Mostly the private sector firms, with the exception of TARIS, handle the
marketing of raisins. TARIS, which was considered a quasi government
entity in the past, has become more independent in recent years,
especially in the administration and management of its financial
requirements.

# Statistical Tables

## PSD Table for Raisins

+---------+-------+--------+-------+--------+-------+--------+------+
| Turkey  |       |        |       |        |       |        |      |
|         |       |        |       |        |       |        |      |
| Raisins |       |        |       |        |       |        |      |
+---------+-------+--------+-------+--------+-------+--------+------+
|         | **2   | **Rev  | **2   | **Esti | **2   | **Fore | **U  |
|         | 003** | ised** | 004** | mate** | 005** | cast** | OM** |
+---------+-------+--------+-------+--------+-------+--------+------+
|         | *     | **Post | *     | **Post | *     | **Post |      |
|         | *USDA | Es     | *USDA | Es     | *USDA | Es     |      |
|         | Off   | timate | Off   | timate | Off   | timate |      |
|         | icial | \[N    | icial | \[N    | icial | \[N    |      |
|         | \[Ol  | ew\]** | \[Ol  | ew\]** | \[Ol  | ew\]** |      |
|         | d\]** |        | d\]** |        | d\]** |        |      |
+---------+-------+--------+-------+--------+-------+--------+------+
| *       |       | 0      |       | 0      |       | 0      | MM/  |
| *Market |       | 9/2003 |       | 9/2004 |       | 9/2005 | YYYY |
| Year    |       |        |       |        |       |        |      |
| Begin** |       |        |       |        |       |        |      |
+---------+-------+--------+-------+--------+-------+--------+------+
| **Area  | 83000 | 83000  | 83000 | 85000  | 0     | 85000  | HA   |
| Pl      |       |        |       |        |       |        |      |
| anted** |       |        |       |        |       |        |      |
+---------+-------+--------+-------+--------+-------+--------+------+
| **Area  | 81000 | 81000  | 82000 | 82000  | 0     | 83000  | HA   |
| Harv    |       |        |       |        |       |        |      |
| ested** |       |        |       |        |       |        |      |
+---------+-------+--------+-------+--------+-------+--------+------+
| **Be    | 23398 | 23398  | 24103 | 23000  | 27103 | 54000  | MT   |
| ginning |       |        |       |        |       |        |      |
| S       |       |        |       |        |       |        |      |
| tocks** |       |        |       |        |       |        |      |
+---------+-------+--------+-------+--------+-------+--------+------+
| **Produ | 2     | 215000 | 2     | 280000 | 0     | 250000 | MT   |
| ction** | 15000 |        | 50000 |        |       |        |      |
+---------+-------+--------+-------+--------+-------+--------+------+
| **Im    | 1621  | 1702   | 1000  | 1000   | 0     | 1000   | MT   |
| ports** |       |        |       |        |       |        |      |
+---------+-------+--------+-------+--------+-------+--------+------+
| **TOTAL | 2     | 240100 | 2     | 304000 | 27103 | 305000 | MT   |
| S       | 40019 |        | 75103 |        |       |        |      |
| UPPLY** |       |        |       |        |       |        |      |
+---------+-------+--------+-------+--------+-------+--------+------+
| **Ex    | 1     | 193093 | 2     | 220000 | 0     | 230000 | MT   |
| ports** | 91916 |        | 20000 |        |       |        |      |
+---------+-------+--------+-------+--------+-------+--------+------+
| **D     | 24000 | 24007  | 28000 | 30000  | 0     | 30000  | MT   |
| omestic |       |        |       |        |       |        |      |
| Consum  |       |        |       |        |       |        |      |
| ption** |       |        |       |        |       |        |      |
+---------+-------+--------+-------+--------+-------+--------+------+
| *       | 24103 | 23000  | 27103 | 54000  | 0     | 45000  | MT   |
| *Ending |       |        |       |        |       |        |      |
| S       |       |        |       |        |       |        |      |
| tocks** |       |        |       |        |       |        |      |
+---------+-------+--------+-------+--------+-------+--------+------+
| **TOTAL | 2     | 240100 | 2     | 304000 | 0     | 305000 | MT   |
| DISTRIB | 40019 |        | 75103 |        |       |        |      |
| UTION** |       |        |       |        |       |        |      |
+---------+-------+--------+-------+--------+-------+--------+------+

## Export Trade Matrix for Raisins

+---------------------+-------------+-------------------+-------------+
| Turkey              |             |                   |             |
|                     |             |                   |             |
| Raisins             |             |                   |             |
+---------------------+-------------+-------------------+-------------+
| Time Period         | Jan. - Dec. | Units:            | Metric Tons |
+---------------------+-------------+-------------------+-------------+
| Exports for:        | 2003        |                   | **2004**    |
+---------------------+-------------+-------------------+-------------+
| U.S.                | 135         | U.S.              | 129         |
+---------------------+-------------+-------------------+-------------+
| Others              |             | Others            |             |
+---------------------+-------------+-------------------+-------------+
| United Kingdom      | 48171       | United Kingdom    | 49687       |
+---------------------+-------------+-------------------+-------------+
| Germany             | 37020       | Germany           | 42599       |
+---------------------+-------------+-------------------+-------------+
| Netherlands         | 27255       | Netherlands       | 30607       |
+---------------------+-------------+-------------------+-------------+
| Italy               | 18037       | Italy             | 18947       |
+---------------------+-------------+-------------------+-------------+
| France              | 12677       | France            | 14640       |
+---------------------+-------------+-------------------+-------------+
| Belgium             | 8159        | Belgium           | 9192        |
+---------------------+-------------+-------------------+-------------+
| Ireland             | 5025        | Ireland           | 5167        |
+---------------------+-------------+-------------------+-------------+
| Spain               | 3117        | Spain             | 3590        |
+---------------------+-------------+-------------------+-------------+
| Austria             | 1520        | Austria           | 1528        |
+---------------------+-------------+-------------------+-------------+
| Poland              | 1068        | Poland            | 1157        |
+---------------------+-------------+-------------------+-------------+
| Total for Others    | 162049      |                   | 177114      |
+---------------------+-------------+-------------------+-------------+
| Others not Listed   | 33544       |                   | 35127       |
+---------------------+-------------+-------------------+-------------+
| Grand Total         | 195728      |                   | 212370      |
+---------------------+-------------+-------------------+-------------+

## Import Trade Matrix for Raisins

+---------------------+-------------+-------------------+-------------+
| Turkey              |             |                   |             |
|                     |             |                   |             |
| Raisins             |             |                   |             |
+---------------------+-------------+-------------------+-------------+
| Time Period         | Jan. - Dec. | Units:            | Metric Tons |
+---------------------+-------------+-------------------+-------------+
| Imports for:        | 2003        |                   | **2004**    |
+---------------------+-------------+-------------------+-------------+
| U.S.                |             | U.S.              |             |
+---------------------+-------------+-------------------+-------------+
| Others              |             | Others            |             |
+---------------------+-------------+-------------------+-------------+
| Uzbekistan          | 331         | Greece            | 579         |
+---------------------+-------------+-------------------+-------------+
| Greece              | 288         | Uzbekistan        | 349         |
+---------------------+-------------+-------------------+-------------+
| United Kingdom      | 271         | France            | 179         |
+---------------------+-------------+-------------------+-------------+
| Canada              | 237         | Netherlands       | 167         |
+---------------------+-------------+-------------------+-------------+
| Netherlands         | 196         | Brazil            | 117         |
+---------------------+-------------+-------------------+-------------+
| Germany             | 102         | Portugal          | 105         |
+---------------------+-------------+-------------------+-------------+
| Portugal            | 96          | Germany           | 62          |
+---------------------+-------------+-------------------+-------------+
| Denmark             | 83          | United Kingdom    | 61          |
+---------------------+-------------+-------------------+-------------+
| Sweden              | 54          | Austria           | 60          |
+---------------------+-------------+-------------------+-------------+
| France              | 46          | New Zealand       | 21          |
+---------------------+-------------+-------------------+-------------+
| Total for Others    | 1704        |                   | 1700        |
+---------------------+-------------+-------------------+-------------+
| Others not Listed   | 317         |                   | 39          |
+---------------------+-------------+-------------------+-------------+
| Grand Total         | 2021        |                   | 1739        |
+---------------------+-------------+-------------------+-------------+