Required Report - public distribution

**Date:** 4/20/2006

**GAIN Report Number:** TU6021

TU6021

**Turkey**

**Dried Fruit**

**Annual**

**2006**

**Approved by:**

![](media/image1.wmf)Cynthia Iglesias, Acting Agricultural Counselor

U.S. Embassy

**Prepared by:**

Unal Sarigedik, Agricultural Specialist

**Report Highlights:**

Turkish raisin production is projected to reach 300 TMT in MY 2006 if
the weather conditions remain favorable during the growing and drying
season. This quantity is significantly larger than it was in MY 2005,
but similar to the levels of MY 2004. Turkey\'s raisin exports are
projected to increase in MY 2006 parallel to the supply. Raisin
production and exports in MY 2005 were both revised downward. TARIS
procured about 41 TMT and exported 26 TMT of raisins so far. Average
export prices in MY 2005 are around USD 1,160, which is higher than a
year ago (USD 1,150). Currently, raisins are traded at around YTL 1.50
and YTL 1.60 (about USD 1.10 and USD 1.20) per kilogram at the Izmir
Commodity Exchange.

Includes PSD Changes: Yes

Includes Trade Matrix: Yes

Annual Report

Ankara \[TU1\]

\[TU\]

Table of Contents

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

[Production 5](#production)

[Production Policy 6](#production-policy)

[Consumption 6](#consumption)

[Trade 7](#trade)

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

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

[Trade Policy 9](#trade-policy)

[Stocks 9](#stocks)

[Marketing 9](#marketing)

# Executive Summary

Turkish raisin production is projected to be good since the weather
conditions have been favorable for growing thus far in MY 2006. Raisin
production is projected to be 300 TMT in MY 2006, if the weather
conditions continue to be favorable during the remainder of the growing
and drying seasons. Projected MY 2006 production level is significantly
higher than the estimates for MY 2005, but about the same as those for
MY 2004. The raisin growing area is projected to remain stable in MY
2006. It is very early to make an assessment on the quality of the MY
2006 crop since the growing season is continuing and the drying season
is far ahead.

MY 2005 raisin production estimates still vary a great deal. PSD
production estimates were reduced slightly to 240 TMT due to lower
yields. Production estimates in MY 2004 were revised slightly upward due
to better than expected yields. Yields are affected by the weather
conditions both during the growing and drying seasons as well as by some
diseases and pests. Fungal diseases and red spiders can be especially
significant in some local areas on affecting the yields. TARIS is
expected to announce the MY 2006 raisin procurement price in September
2006.

Domestic raisin consumption for confectionary use is projected to reach
30,000 MT. Total consumption, however, varies depending upon total
supply and the quality of the crop since raki producers also use raisins
for distillation. Raisin prices at the Izmir Commodity exchange were
around YTL 1.51 to YTL 1.60 per kilogram for standard #7 and standard
#10 raisins on April 7, 2004. The price for standard #9 was YTL 1.56 (or
about USD 1.15) at the same commodity exchange on the same date.

TARIS, a State Economic Enterprises (SEE), which played a more
significant role in the past in the raisin market, still plays a major
role in Turkey. In recent years, raisin area and production increased
significantly and TARIS procured large quantities to protect its
members. TARIS, as one of the more financially stable SEE's, has
typically been able to easily obtain banks loans.

TARIS procured about 41 TMT of raisins and exported about 26 TMT thus
far in MY 2005 (September 2005 - March 2006). TARIS exports are
projected to reach 35 TMT for the entire marketing year (MY 2005).
Turkey is projected to export a significantly larger quantity of raisins
in MY 2006 parallel to a projected increase in production. Raisin export
estimates were revised downward in MY 2005, but revised upward in MY
2004 according to industry sources and Aegean Exporters Union data.

Average export prices were higher (around USD 1,160 per MT) during the
first seven months (September 1, 2005 -- March 31, 2006) in MY 2005
compared (USD 1,050 per MT) to the same period a year ago. These prices
might be slightly higher or lower depending upon the standard and grade
(A, B or C).

Industry sources estimate that TARIS had about 25 TMT of raisins in
stocks in the beginning of MY 2005. Total carryover stocks are projected
to increase at the end of MY 2006 due to a projected increase in supply.

In response to the commitment it 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 SEE's, TARIS appears to
be in a comparatively good economic position to meet its financial
obligations, particularly in the raisin sector, which usually earns a
profit.

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

Currently USD 1.00 is around YTL 1.34 compared to YTL 1.35 a year ago.

# Production

Turkish raisin production is projected to be good since the weather
conditions have been favorable for growing thus far in MY 2006. However,
there is a possibility of a frost in growing areas. Raisin production is
projected at 300 TMT in MY 2006 if the weather conditions continue to be
favorable during the growing and drying seasons. This quantity is
significantly higher (about twenty-five percent) than the MY 2005
estimates, but about the same as the MY 2004 estimates. The raisin
growing area is projected to remain stable in MY 2006. MY 2005 raisin
production estimates still vary a great deal. PSD production estimates
were reduced slightly to 240 TMT due to lower yields, 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, they constitute about one-third of the total
grape crop and are grown only in Turkey's Aegean Region. Total fresh
seedless grape consumption has increased in recent years and it is
estimated now that around 20 percent of the seedless grape crop is
consumed fresh and/or exported as fresh with the remainder going to
raisin production. Total seedless grape production in MY 2005 is
estimated at about 1.2 MMT. Of this total, it is estimated that about
240 TMT are consumed or exported as fresh. Using an average conversion
ratio of about 4 to 1 (this was assumed as 4.5 to 1 earlier, but revised
as 4 to 1. According to industry sources, 4 to 1 more accurately
represents the conversion rate now since the quality and cleanliness of
the product have improved significantly in recent years), MY 2005 raisin
production is estimated at 240,000 MT. PSD raisin production for MY 2004
was revised slightly upward to 300,000 MT, according to the industry
sources.

+----------------+------+-------+------+-------+-------+-------+------+
| Turkey         |      |       |      |       |       |       |      |
|                |      |       |      |       |       |       |      |
| ###### Raisins |      |       |      |       |       |       |      |
+----------------+------+-------+------+-------+-------+-------+------+
|                | **20 | *     | **20 | **    | **2   | **    | #### |
|                | 04** | *Revi | 05** | Estim | 006** | Forec | #### |
|                |      | sed** |      | ate** |       | ast** |  UOM |
+----------------+------+-------+------+-------+-------+-------+------+
|                | **   | **P   | **   | **P   | **U   | *     |      |
|                | USDA | ost** | USDA | ost** | SDA** | *Post |      |
|                | Of   |       | Of   |       |       | Es    |      |
|                | fici | **    | fici | **    | **    | timat |      |
|                | al** | Estim | al** | Estim | Offic | e\[Ne |      |
|                |      | ate** |      | ate** | ial** | w\]** |      |
|                | **\  |       | **\  |       |       |       |      |
|                | [Old | *     | [Old | *     | *     |       |      |
|                | \]** | *\[Ne | \]** | *\[Ne | *\[Ol |       |      |
|                |      | w\]** |      | w\]** | d\]** |       |      |
+----------------+------+-------+------+-------+-------+-------+------+
| ####### Mar    |      | 09    |      | 09    |       | 09    | MM/  |
| ket Year Begin |      | /2004 |      | /2005 |       | /2006 | YYYY |
+----------------+------+-------+------+-------+-------+-------+------+
| **Area         | 8    | 85000 | 0    | 85000 | 0     | 85000 | HA   |
| Planted**      | 5000 |       |      |       |       |       |      |
+----------------+------+-------+------+-------+-------+-------+------+
| **Area         | 8    | 82000 | 0    | 83000 | 0     | 85000 | HA   |
| Harvested**    | 2000 |       |      |       |       |       |      |
+----------------+------+-------+------+-------+-------+-------+------+
| **Beginning    | 2    | 23000 | 5    | 47000 | 0     | 50000 | MT   |
| Stocks**       | 3000 |       | 4000 |       |       |       |      |
+----------------+------+-------+------+-------+-------+-------+------+
| **Production** | 28   | 3     | 0    | 2     | 0     | 3     | MT   |
|                | 0000 | 00000 |      | 40000 |       | 00000 |      |
+----------------+------+-------+------+-------+-------+-------+------+
| **Imports**    | 1000 | 4000  | 0    | 4000  | 0     | 1000  | MT   |
+----------------+------+-------+------+-------+-------+-------+------+
| **TOTAL        | 30   | 3     | 5    | 2     | 0     | 3     | MT   |
| SUPPLY**       | 4000 | 27000 | 4000 | 91000 |       | 51000 |      |
+----------------+------+-------+------+-------+-------+-------+------+
| **Exports**    | 22   | 2     | 0    | 2     | 0     | 2     | MT   |
|                | 0000 | 40000 |      | 00000 |       | 50000 |      |
+----------------+------+-------+------+-------+-------+-------+------+
| **Domestic     | 3    | 40000 | 0    | 41000 | 0     | 46000 | MT   |
| Consumption**  | 0000 |       |      |       |       |       |      |
+----------------+------+-------+------+-------+-------+-------+------+
| **Ending       | 5    | 47000 | 0    | 50000 | 0     | 55000 | MT   |
| Stocks**       | 4000 |       |      |       |       |       |      |
+----------------+------+-------+------+-------+-------+-------+------+
| **TOTAL        | 30   | 3     | 0    | 2     | 0     | 3     | MT   |
| DISTRIBUTION** | 4000 | 27000 |      | 91000 |       | 51000 |      |
+----------------+------+-------+------+-------+-------+-------+------+

Seedless grape production expanded significantly in Turkey in the 1990's
due to more intensive cultivation and better irrigation techniques. The
Union of Agricultural Sales Cooperatives (TARIS) has recommended in
recent years that producers limit their seedless grape orchard area
because the export market was supposedly 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 in recent
years. It is estimated that in MY 2005 about 30 TMT of Thompson type
raisins were produced.

## Production Policy

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.

## 

# Consumption

Domestic raisin consumption fluctuates depending upon supply and quality
of the raisin crop. Turkey is estimated to consume about 30 TMT of
raisins for confectionary purposes. Raisins, especially low quality
raisins, are also used for distillation purposes in raki production
(raki is a strong Turkish alcoholic drink). The TEKEL's liquor
production was privatized at the beginning of 2004 and several private
companies are now producing raki. As a result, Turkish domestic raisin
consumption was increased in MY 2005. The exact quantity of raisins
being used for raki production is not known. Industry sources estimate
that a total of 80 MT of fresh and dried grapes are used to produce
raki. The mix between fresh and dried grapes for producing raki changes
with the price and availability of lower quality raisins. It is
estimated by the industry sources that privatized raki producers
procured about 10 TMT of raisins with a price around YTL 0.80 per
kilogram. TARIS has also started to produce raki jointly with a private
partner. Thus, TARIS can use low quality raisins from its stocks in raki
production.

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 GOT 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 from as low as 9,000 MT to as high as
75,000 MT during the last ten years due to unstable production and
quality. However, TARIS procured larger quantities in recent years due
to larger supply. TARIS procured 40,875 MT of raisins in MY 2005,
including 13,124 MT of Thompson type and 30 MT of organic raisins and
paid about YTL 57 million (or about USD 42 million). TARIS primarily
bought (about one-third) Thompson type raisins, followed by standard #8
(about 10.4 TMT), standard #8.5 (about 9 TMT), and standard #9 (about
8.5 TMT). TARIS bought 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). 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; therefore, it is expected that Taris will announce the
MY 2006 procurement price in September 2006. TARIS announced the
procurement price in MY 2005 as YTL 1.27 per kilogram for standard #9.
This is a net price (the price paid to producers after taxes). TARIS
also paid YTL 1.27 per kilogram of Thompson type raisins. TARIS paid YTL
1.24 for standard #8, and YTL 1.32 per kilogram of standard #10. TARIS
also paid a 20 percent premium for all standards of organic raisins. MY
2005 prices were slightly higher than TARIS paid a year ago (YTL 1.19
for standard #9), but still lower than the prices (YTL 1.40 for standard
#9) were paid two years ago. However, TARIS paid lower prices (YTL 1.27)
for Thompson type raisins in MY 2005 compared to the price (YTL 1.60) in
MY 2004.

The weather conditions were normal during the both growing and drying
seasons. As a result, the quality of the MY 2005 crop was normal, but
not as good as it was in MY 2004. In MY 2005, about 15 percent was
standard #10, about 35 percent was standard #9, about 40 percent was
standard #8, and about 15 percent was standard #7. In MY 2004, about 20
percent was standard #10, about 65 percent was standard #9, and 15
percent was standard #8.

The Izmir Commodity Exchange is the main cash market for raisins. On
April 17, 2006, spot prices at the Exchange were in between YTL 1.51 and
YTL 1.60. The price was around YTL 1.56 (about USD 1.15) per kilogram
for standard #9. On the same day, private companies bought a total of 35
MT but TARIS did not sell any. TARIS sold about 6 MT of raisins at the
Izmir Commodity Exchange two weeks ago, which decreased the price for
standard #9 from YTL 1.65 to YTL 1.56, according to industry sources.

## 

# Trade

MY 2006 raisin exports are projected at 250 TMT due to larger supply.
The EU is the primary market for Turkish raisin exports.

Raisin export estimates were reduced to 200 TMT in MY 2005 according to
industry sources. According to the Aegean Exporters Union data, Turkey
exported about 133 TMT of raisins between September 1, 2005 and April 1,
2006 compared to about 160 TMT during the same period a year ago. So far
in MY 2005, TARIS has exported about 26 TMT and projects that exports
may reach 35 TMT by the end of the marketing year. TARIS has been
penetrating more into the international markets in recent years and, as
a result, it has increased its exports. In MY 2004, TARIS exported about
30 TMT.

Average export prices were higher (about USD 1,160 per MT) for the
period September 1, 2005 and April 1, 2006 compared to the same period a
year ago (about USD 1,050 per MT). Export prices currently are around
USD 1,140 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).

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

## 

## 

## Export Trade Matrix

+--------------------+-------------+-------------------+-------------+
| Turkey             |             |                   |             |
|                    |             |                   |             |
| Raisins            |             |                   |             |
+--------------------+-------------+-------------------+-------------+
| Time Period        | Sep. - Aug. | Units:            | Metric Tons |
+--------------------+-------------+-------------------+-------------+
| Exports for:       | 2004        | Jan. - Dec.       | **2005**    |
+--------------------+-------------+-------------------+-------------+
| U.S.               | 182         | U.S.              | 186         |
+--------------------+-------------+-------------------+-------------+
| Others             |             | Others            |             |
+--------------------+-------------+-------------------+-------------+
| United Kingdom     | 59170       | United Kingdom    | 60100       |
+--------------------+-------------+-------------------+-------------+
| Germany            | 44822       | Germany           | 41040       |
+--------------------+-------------+-------------------+-------------+
| Netherlands        | 32081       | Netherlands       | 27958       |
+--------------------+-------------+-------------------+-------------+
| Italy              | 19024       | Italy             | 18017       |
+--------------------+-------------+-------------------+-------------+
| France             | 15991       | France            | 14982       |
+--------------------+-------------+-------------------+-------------+
| Australia          | 14509       | Australia         | 13006       |
+--------------------+-------------+-------------------+-------------+
| Belgium            | 9743        | Belgium           | 8348        |
+--------------------+-------------+-------------------+-------------+
| Ireland            | 5631        | Ireland           | 5664        |
+--------------------+-------------+-------------------+-------------+
| New Zealand        | 4721        | New Zealand       | 3861        |
+--------------------+-------------+-------------------+-------------+
| Spain              | 3548        | Spain             | 3176        |
+--------------------+-------------+-------------------+-------------+
| Total for Others   | 209240      |                   | 196152      |
+--------------------+-------------+-------------------+-------------+
| Others not Listed  | 29994       |                   | 24257       |
+--------------------+-------------+-------------------+-------------+
| Grand Total        | 239416      |                   | 220595      |
+--------------------+-------------+-------------------+-------------+

## Import Trade Matrix

+--------------------+-------------+-------------------+-------------+
| Turkey             |             |                   |             |
|                    |             |                   |             |
| Raisins            |             |                   |             |
+--------------------+-------------+-------------------+-------------+
| Time Period        | Sep. - Aug. | Units:            | Metric Tons |
+--------------------+-------------+-------------------+-------------+
| Imports for:       | 2004        | Jan. - Dec.       | **2005**    |
+--------------------+-------------+-------------------+-------------+
| U.S.               |             | U.S.              |             |
+--------------------+-------------+-------------------+-------------+
| Others             |             | Others            |             |
+--------------------+-------------+-------------------+-------------+
| Uzbekistan         | 2275        | Uzbekistan        | 2874        |
+--------------------+-------------+-------------------+-------------+
| Greece             | 653         | Greece            | 563         |
+--------------------+-------------+-------------------+-------------+
| Germany            | 250         | Germany           | 230         |
+--------------------+-------------+-------------------+-------------+
| Netherlands        | 113         | Netherlands       | 153         |
+--------------------+-------------+-------------------+-------------+
| Brazil             | 100         | United Kingdom    | 141         |
+--------------------+-------------+-------------------+-------------+
| Poland             | 84          | Afghanistan       | 102         |
+--------------------+-------------+-------------------+-------------+
| France             | 82          | Poland            | 84          |
+--------------------+-------------+-------------------+-------------+
| United Kingdom     | 79          | Iran              | 65          |
+--------------------+-------------+-------------------+-------------+
| Spain              | 41          | Spain             | 41          |
+--------------------+-------------+-------------------+-------------+
| Latvia             | 21          | France            | 39          |
+--------------------+-------------+-------------------+-------------+
| Total for Others   | 3698        |                   | 4292        |
+--------------------+-------------+-------------------+-------------+
| Others not Listed  | 99          |                   | 131         |
+--------------------+-------------+-------------------+-------------+
| Grand Total        | 3797        |                   | 4423        |
+--------------------+-------------+-------------------+-------------+

## Trade Policy

There has never been any export subsidy for raisins. In order to protect
local producers, the GOT announced a 54.9 percent import duty in 2006,
which was the same rate as last year for raisins of all origins based on
CIF value.

# Stocks

Official information on raisin stocks is not available. It is estimated
that TARIS had about 25 TMT of raisins in stocks in the beginning of MY
2005. Carryover stocks are estimated to be slightly higher at the end of
MY 2006 and also projected to increase further at the end of 2006 due to
a projected increase in supply.

# 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.