Voluntary Report - public distribution

**Date:** 2/1/2008

**GAIN Report Number:** TU8005

TU8005

**Turkey**

**Cotton and Products**

**Cotton and products update**

**2008**

**Approved by:**

![](media/image1.wmf)Ralph Gifford, Agricultural Counselor

U.S. Embassy

**Prepared by:**

Ibrahim Sirtioglu, Ag. Marketing Specialist

**Report Highlights:**

Estimates of Turkey\'s MY 2007 domestic cotton consumption and imports
have both been lowered, to 1.42 MMT (6.5 million bales) and 725,000 MT
(3.2 million bales) respectively. the high value of the Turkish Lira has
been hurting Turkish yarn and textile exports and aiding imports of both
yarn and textiles from low-cost producers such as Uzbekistan and India.
MY 2008 planting of cotton also is forecast to decline as high grain
prices encourage corn planting in traditional cotton areas. Although
total cotton imports are expected to decline in MY 2007, imports of U.S.
cotton should remain the same at about 500,000 MT (2.3 million bales)
hence U.S. market share will increase. The GSM-102 Export Credit
Guarantee Program plays an important role in U.S. exports to Turkey; the
delay in announcing the FY2008 program had an adverse effect on
utilization.

Includes PSD Changes: Yes

Includes Trade Matrix: Yes

Quarterly Report

Ankara \[TU1\]

\[TU\]

Table of Contents

[Production 3](#production)

[Consumption 3](#consumption)

[Trade 3](#trade)

# 

# Production

Turkey's MY 2007 cotton area and production estimates have been lowered
to 550,000 hectares and 700,000 MT(3.2 million bales) due to increased
planting of alternative crops such as vegetables, and affect of drought
and heat during the growing season. MY 2006 cotton area and production
has been reduced as well to 825,000 MT (3.7 million bales) and 630,000
hectares due to excessive rain during harvest.

MY 2008 cotton planting will depend on the production bonus program for
the MY 2007 crop. Yet regardless of the upcoming announcement, farmers
in some of the traditional cotton growing areas, including the GAP
region, are expected to plant corn due to higher returns. The recent
increase of VAT on domestic cotton trade from 1 percent to 8 percent
will increase the cost of local cotton trade and put additional
financial burden on traders and adversely affect planting of cotton.

In search of better prices, some farmers have turned to organic cotton
production: although total cotton production is declining, organic
cotton production has grown rapidly in recent years. Turkey became the
world's number one organic cotton producing country in MY 2006,
surpassing India, with 58,000 MT(266,000 bales). Organic cotton
production in 2004 and 2005 were 25,000 MT (115,000 bales) and 38,000 MT
(175,000 bales) respectively.

# Consumption

Turkish domestic cotton consumption is expected to decline to 1.42 MMT
(6.5 million bales) due to adverse affects of the strong Turkish Lira on
exports. While Turkish exporters are facing difficulties exporting,
cheap yarn and textile imports from CIS countries such as Uzbekistan and
Turkmenistan and South Asian Countries such as India and Pakistan are
hurting the domestic consumption. The end of Chinese textile export
quotas in 2008 is expected to have an adverse affect on Turkish textile
exports as well. About 35 mills are reported to be closed or cease
operation until conditions become favorable.

# 

# Trade

Total imports in MY 2007 are expected to decline to 700,000 MT(3.2
Million bales) compared to early season estimates of 875,000 MT(4
Million bales). Although total cotton imports will decline in quantity,
purchases from the United States should remained as forecast and U.S.
market share will increase due to short supplies in other producing
countries, such as Greece and Syria, and also due to continued
availability of the GSM-102 export credit guarantee program. The late
announcement of the FY 2008 program had an adverse affect on utilization
of the program for cotton. Some mills bought from other sources; some
mills postponed purchases and reportedly registered cotton purchases
immediately after the announcement of the new program.

According to official sources Turkey imported about 276,000 MT (1.27
Million bales) of cotton during the first four months of MY 2007 of
which 74 percent was U.S. cotton. Greece, CIS countries and India were
the other suppliers. Turkish cotton exports during the same period were
about 14,000 MT (65,000 bales) but export destinations are not
available.

+-------------+--------+--------+--------+--------+--------+--------+
| **Turkey**  |        |        |        |        |        |        |
|             |        |        |        |        |        |        |
| **Cotton**  |        |        |        |        |        |        |
|             |        |        |        |        |        |        |
| (HE         |        |        |        |        |        |        |
| CTARES)(MT) |        |        |        |        |        |        |
+-------------+--------+--------+--------+--------+--------+--------+
|             | **     | **Rev  | **     | **Esti | **     | **Fore |
|             | 2005** | ised** | 2006** | mate** | 2007** | cast** |
+-------------+--------+--------+--------+--------+--------+--------+
|             | **USDA | **Post | **USDA | **Post | **USDA | **Post |
|             | Offi   | Esti   | Offi   | Esti   | Offi   | Esti   |
|             | cial** | mate** | cial** | mate** | cial** | mate** |
|             |        |        |        |        |        |        |
|             | **\[O  | **\[N  | **\[O  | **\[N  | **\[O  | **\[N  |
|             | ld\]** | ew\]** | ld\]** | ew\]** | ld\]** | ew\]** |
+-------------+--------+--------+--------+--------+--------+--------+
| **Market    |        | 0      |        | 0      |        | 0      |
| Year        |        | 8/2005 |        | 8/2006 |        | 8/2007 |
| Begin**     |        |        |        |        |        |        |
+-------------+--------+--------+--------+--------+--------+--------+
| **Area      | 580000 | 580000 | 670000 | 670000 | 570000 | 550000 |
| Planted**   |        |        |        |        |        |        |
+-------------+--------+--------+--------+--------+--------+--------+
| **Area      | 580000 | 580000 | 640000 | 630000 | 570000 | 550000 |
| Harvested** |        |        |        |        |        |        |
+-------------+--------+--------+--------+--------+--------+--------+
| **Beginning | 276025 | 276025 | 240237 | 240237 | 292897 | 267897 |
| Stocks**    |        |        |        |        |        |        |
+-------------+--------+--------+--------+--------+--------+--------+
| **P         | 750000 | 750000 | 850000 | 825000 | 725000 | 700000 |
| roduction** |        |        |        |        |        |        |
+-------------+--------+--------+--------+--------+--------+--------+
| **Imports** | 744212 | 744212 | 872660 | 872660 | 875000 | 725000 |
+-------------+--------+--------+--------+--------+--------+--------+
| **MY Imp.   | 412176 | 412176 | 525049 | 525049 | 500000 | 500000 |
| from U.S.** |        |        |        |        |        |        |
+-------------+--------+--------+--------+--------+--------+--------+
| **TOTAL     | 1      | 1      | 1      | 1      | 1      | 1      |
| SUPPLY**    | 770237 | 770237 | 962897 | 937897 | 892897 | 692897 |
+-------------+--------+--------+--------+--------+--------+--------+
| **Exports** | 30000  | 30000  | 45000  | 45000  | 25000  | 30000  |
+-------------+--------+--------+--------+--------+--------+--------+
| **USE Dom.  | 1      | 1      | 1      | 1      | 1      | 1      |
| Co          | 500000 | 500000 | 625000 | 625000 | 600000 | 425000 |
| nsumption** |        |        |        |        |        |        |
+-------------+--------+--------+--------+--------+--------+--------+
| **Loss Dom. | 0      | 0      | 0      | 0      | 0      | 0      |
| Co          |        |        |        |        |        |        |
| nsumption** |        |        |        |        |        |        |
+-------------+--------+--------+--------+--------+--------+--------+
| **TOTAL     | 1      | 1      | 1      | 1      | 1      | 1      |
| Dom.        | 500000 | 500000 | 625000 | 625000 | 600000 | 425000 |
| Co          |        |        |        |        |        |        |
| nsumption** |        |        |        |        |        |        |
+-------------+--------+--------+--------+--------+--------+--------+
| **Ending    | 240237 | 240237 | 292897 | 267897 | 267897 | 237897 |
| Stocks**    |        |        |        |        |        |        |
+-------------+--------+--------+--------+--------+--------+--------+
| **TOTAL     | 1      | 1      | 1      | 1      | 1      | 1      |
| DIS         | 770237 | 770237 | 962897 | 937897 | 892897 | 692897 |
| TRIBUTION** |        |        |        |        |        |        |
+-------------+--------+--------+--------+--------+--------+--------+

<table style="width:100%;">
<colgroup>
<col style="width: 15%" />
<col style="width: 10%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 0%" />
<col style="width: 9%" />
<col style="width: 8%" />
<col style="width: 10%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="11"><p><strong>Turkey</strong></p>
<p><strong>Cotton</strong></p>
<p>(HECTARES)1000 480 lb. Bales(PERCENT)(KG/HA)</p></td>
</tr>
<tr class="even">
<td></td>
<td>2005</td>
<td>Revised</td>
<td></td>
<td>2006</td>
<td>Estimate</td>
<td></td>
<td colspan="2">2007</td>
<td>Forecast</td>
<td></td>
</tr>
<tr class="odd">
<td></td>
<td>USDA<br />
Official</td>
<td>Post<br />
Estimate</td>
<td>Post<br />
Estimate<br />
New</td>
<td>USDA<br />
Official</td>
<td>Post<br />
Estimate</td>
<td colspan="2">Post<br />
Estimate<br />
New</td>
<td>USDA<br />
Official</td>
<td>Post<br />
Estimate</td>
<td>Post<br />
Estimate<br />
New</td>
</tr>
<tr class="even">
<td>Market Year Begin</td>
<td></td>
<td>08/2005</td>
<td>08/2005</td>
<td></td>
<td>08/2006</td>
<td colspan="2">08/2006</td>
<td></td>
<td>08/2007</td>
<td>08/2007</td>
</tr>
<tr class="odd">
<td>Area Planted</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td colspan="2">0</td>
<td>0</td>
<td>0</td>
<td>0</td>
</tr>
<tr class="even">
<td>Area Harvested</td>
<td>600</td>
<td>580</td>
<td>580</td>
<td>640</td>
<td>640</td>
<td colspan="2">630</td>
<td>570</td>
<td>570</td>
<td>550</td>
</tr>
<tr class="odd">
<td>Beginning Stocks</td>
<td>1790</td>
<td>1270</td>
<td>1270</td>
<td>1665</td>
<td>1105</td>
<td colspan="2">1105</td>
<td>2055</td>
<td>1345</td>
<td>1230</td>
</tr>
<tr class="even">
<td>Production</td>
<td>3550</td>
<td>3450</td>
<td>3450</td>
<td>3900</td>
<td>3900</td>
<td colspan="2">3785</td>
<td>3300</td>
<td>3327</td>
<td>3215</td>
</tr>
<tr class="odd">
<td>Imports</td>
<td>3400</td>
<td>3423</td>
<td>3423</td>
<td>4000</td>
<td>4005</td>
<td colspan="2">4005</td>
<td>3750</td>
<td>4016</td>
<td>3325</td>
</tr>
<tr class="even">
<td>MY Imports from U.S.</td>
<td>0</td>
<td>1896</td>
<td>1896</td>
<td>0</td>
<td>2410</td>
<td colspan="2">2410</td>
<td>0</td>
<td>2295</td>
<td>2295</td>
</tr>
<tr class="odd">
<td>Total Supply</td>
<td>8740</td>
<td>8143</td>
<td>8143</td>
<td>9565</td>
<td>9010</td>
<td colspan="2">8895</td>
<td>9105</td>
<td>8688</td>
<td>7770</td>
</tr>
<tr class="even">
<td>Exports</td>
<td>175</td>
<td>138</td>
<td>138</td>
<td>210</td>
<td>207</td>
<td colspan="2">207</td>
<td>200</td>
<td>115</td>
<td>140</td>
</tr>
<tr class="odd">
<td>Use</td>
<td>6900</td>
<td>6900</td>
<td>6900</td>
<td>7300</td>
<td>7458</td>
<td colspan="2">7458</td>
<td>7200</td>
<td>7343</td>
<td>6540</td>
</tr>
<tr class="even">
<td>Loss</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td colspan="2">0</td>
<td>0</td>
<td>0</td>
<td>0</td>
</tr>
<tr class="odd">
<td>Total Dom. Cons.</td>
<td>6900</td>
<td>6900</td>
<td>6900</td>
<td>7300</td>
<td>7458</td>
<td colspan="2">7458</td>
<td>7200</td>
<td>7343</td>
<td>6540</td>
</tr>
<tr class="even">
<td>Ending Stocks</td>
<td>1665</td>
<td>1105</td>
<td>1105</td>
<td>2055</td>
<td>1345</td>
<td colspan="2">1230</td>
<td>1705</td>
<td>1230</td>
<td>1090</td>
</tr>
<tr class="odd">
<td>Total Distribution</td>
<td>8740</td>
<td>8143</td>
<td>8143</td>
<td>9565</td>
<td>9010</td>
<td colspan="2">8895</td>
<td>9105</td>
<td>8688</td>
<td>7770</td>
</tr>
<tr class="even">
<td>Stock to Use %</td>
<td>23.53357</td>
<td>15.70048</td>
<td>15.70048</td>
<td>27.36352</td>
<td>17.54729</td>
<td colspan="2">16.04697</td>
<td>23.04054</td>
<td>16.49236</td>
<td>16.31737</td>
</tr>
<tr class="odd">
<td>Yield</td>
<td>1288</td>
<td>1295</td>
<td>1295</td>
<td>1327</td>
<td>1327</td>
<td colspan="2">1308</td>
<td>1261</td>
<td>1271</td>
<td>1273</td>
</tr>
</tbody>
</table>

  ------------------------ -------------- ------------------ -------------
  **Import Trade Matrix**                                    

  **Country**              Turkey                            

  **Commodity**            Cotton         Units:             MT

  Time Period              Aug/July                          Aug/Nov

  Imports for:             MY2006                            **MY2007**

  U.S.                     525049         U.S.               203656

  Others                                  Others             

  Total C.I.S.             116867         Greece             28622

  Greece                   94969          CIS                17350

  India                    83560          India              6468

  Mersin FTZ               17047          Brazil             5170

  Syria                    8792           Egypt              1570

  Egypt                    5287           Mersin FTZ         1110

  Brazil                   1137           Syria              571

                                                              

                                                              

                                                              

  Total for Others         327659                            60861

  Others not Listed        19952                             11460

  Grand Total              872660                            275977

                                                             

                                                             

  **Import Trade Matrix**                                    

  **Country**              Turkey                            

  **Commodity**            Cotton         Units:             Bales

  Time Period              Aug/July                          Aug/Nov

  Imports for:             MY2006                            **MY2007**

  U.S.                     2409975        U.S.               934780

  Others                                  Others             

  Total C.I.S.             536420         Greece             131375

  Greece                   435908         CIS                79636

  India                    383540         India              28688

  Mersin FTZ               78245          Brazil             23730

  Syria                    40355          Egypt              7206

  Egypt                    24267          Mersin FTZ         5095

  Brazil                   5219           Syria              2620

                                                              

                                                              

                                                              

  Total for Others         327659                            279352

  Others not Listed        91580                             52601

  Grand Total              2829214                           1266733
  ------------------------ -------------- ------------------ -------------