Required Report - public distribution

**Date:** 1/4/2007

**GAIN Report Number:** TU7001

TU7001

**Turkey**

**Cotton and Products**

**Cotton update**

**2007**

**Approved by:**

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

U.S. Embassy

**Prepared by:**

Ibrahim Sirtioglu, Agricultural Marketing Specialist

**Report Highlights:**

MY 2006 Turkish cotton production is estimated to be about 875,000 MT (4
million bales). Cotton planting has increased in all regions in MY 2006
and early season production estimates were about 950,000 MT (4.3 million
bales) but excessive rains during harvest damaged the fields and some
cotton was left in the fields, lowering total production. During MY 2005
Turkey imported 744,000 MT (3.4 million bales) of cotton; the United
States was the leading supplier with 412,000 MT (1.9 million bales). In
MY 2006, a projected increase in cotton consumption combined with a lack
of quality cotton in the domestic market and from Greece (Turkey\'s
number two supplier) is expected to increase import demand for U.S.
cotton.

Includes PSD Changes: Yes

Includes Trade Matrix: Yes

Quarterly Report

Ankara \[TU1\]

\[TU\]

Table of Contents

[**Production 3**](#production)

[Consumption 3](#consumption)

[Trade 4](#trade)

[PSD, Cotton 5](#psd-cotton)

[Import Trade Matrix, Cotton 6](#import-trade-matrix-cotton)

[Export Trade Matrix, Cotton 7](#export-trade-matrix-cotton)

# Production

MY 2006 Turkish cotton planted area rose significantly to 670,000
hectares, compared to 560,000 hectares the previous year and early
season estimates for the crop were as high as 950,000 MT (4.3 million
bales). Almost all the Turkish cotton fields are irrigated, and
increased use of certified seeds has supported higher yields. But
excessive rains during the picking season in all cotton producing areas
adversely affected quality and total production. In some areas,
particularly in the Cukurova region, severe rains and subsequent
flooding damaged cotton crop quality and yield to the extent that it was
not feasible for farmers to pick all their cotton so some has been left
in the fields. Increased machine picking prior to the rains reported to
prevent further loses of crop. Following the floods estimates of Turkish
lint cotton planted area and production for MY 2006 were lowered to
640,000 hectares and 875,000 MT (4 million bales).

The government is supporting cotton planting by keeping cotton under the
production support system; accordingly the government paid YTL 0.32 per
kilogram for seed cotton produced with certified seeds for the MY 2005
crop and announced that it will pay YTL 0.35 per kilogram for MY 2006
crop. The bonus is viewed as a valuable instrument to maintain cotton
planting in Turkey.

Turkish cotton farmers, searching for ways to make cotton planting
profitable and to compete with imported cotton, reportedly utilized a
record number of picking machines this season. According to trade
sources about 250 different cotton picking machines \--new and used,
western and Uzbek---were used this season, the majority for the first
time. Sources also indicate that increasing use of machinery helped to
avoid the cost and burden of hand picking labor and made cotton planting
feasible for some farmers. The number of picking machines is expected to
continue to increase in coming years. It is also reported that
cooperatives (Antbirlik, Cukobirlik, Taris) are going ahead with their
bio-diesel production plans to cut cost of production.

Losses due to rains in MY 2006 are expected to make some farmers switch
to corn and wheat in MY 2007; as a result MY 2007 cotton planting is
expected to decline to 600.000 hectares and 850,000 MT (3.9 million
bales).

# Consumption

Turkish cotton consumption declined during MY 2005 to 1.5 million MT
(6.9 million bales).

The decline is attributed to the competition of China in international
textile markets. Turkish yarn producers, at the same time, are in tough
competition with India, Pakistan and Central Asian Countries for cotton
yarn exports. An over-valued Turkish Lira (YTL) is also reported to be
working against the Turkish exporters. While textile exports to the US
declined during MY 2005 due to Chinese and other Asian countries
competition, Europe remained Turkey's main export market. Available
exporters union data show that textile exports to US were down 45
percent in January, 31 percent in February and 35 percent in June 2006
compared to a year ago. Available data also indicate that textile
exports to the EU represents about 55 to 60 percent of the total annual
exports.

In order to remain competitive Turkish mills are trying to cut costs by
producing their own energy and increasing fashion and innovation. It has
been reported that Turkish textile exports are in increase since the
last fall. According to the Textile Exporters Union exports of textiles
in November reached USD 1.25 billion up 25 percent compared to November
2005. The industry representatives projects about sixteen percent
increase in 2007 for ready-to- wear sector exports and project exports
to reach USD 16 billion compared to USD 13.8 in 2006.

Domestic demand for textiles also is increasing due to favorable local
economic situation. As a result MY 2006 domestic cotton consumption is
expected to increase to 1.57 million MT (7.2 million bales).

## 

# Trade

Turkey continued to import about a third of its cotton supply in MY
2005. Total imports reached 744,000 MT (3.4 million bales) slightly
higher than MY 2004. The record import year is attributed to local mills
and importers' efforts to secure supplies with attractive prices before
the Step 2 program ends in MY 2006. The United States continued to be
the leading supplier with 412,000 MT (1.9 million bales) constituting
fifty-five percent of the total imports. Availability of GSM-102 export
guarantee program also supported U.S. cotton exports to Turkey; about
100 million dollars worth of U.S. cotton is imported to Turkey under the
program during FY 2006. Greece (188,000 MT/865.000 bales) and Syria
(45,000 MT/210,000 bales) were the other leading exporters.

Because of rain damage to the domestic cotton crop, Turkey's import
demand for high quality cotton will continue to increase during MY 2006.
Producers in Greece, Turkey's number two supplier, faced similar
excessive rains that lowered quality. Therefore Turkey is expected to
import large quantities of cotton from other sources, including the
United States.

**Important note:** Official cotton import and export figures for all of
MY 2005 are not available. Post utilized trade estimates from private
sources on PSD and on the import trade matrix. However, available import
numbers from private sources do not carry country-by-country breakdown
figures for CIS and Western Africa: available official figures for the
first ten months (August 2005 --May 2006) shows imports of 10,275 MT
from Uzbekistan, 9,105 MT from Turkmenistan, 7,112 MT from Azerbaijan,
1,730 MT from Tajikistan, 937 MT from Kyrgyzstan and 68 MT from
Kazakhstan.

Nor do private sources carry country break down figures for the whole
marketing year, therefore post utilized available official export
figures for the first ten months of the year on the trade matrixes. Post
will update trade figures for the marketing year when official figures
become available.

# PSD, Cotton

<table style="width:100%;">
<colgroup>
<col style="width: 14%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
<col style="width: 9%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="10"><p>Turkey</p>
<h6 id="cotton">Cotton</h6>
<p>(HECTARES) 1000 480 lb. Bales</p></td>
</tr>
<tr class="even">
<td></td>
<td><strong>2004</strong></td>
<td><strong>Revised</strong></td>
<td></td>
<td><strong>2005</strong></td>
<td><strong>Estimate</strong></td>
<td></td>
<td><strong>2006</strong></td>
<td><strong>Forecast</strong></td>
<td></td>
</tr>
<tr class="odd">
<td></td>
<td><strong>USDA<br />
Official</strong></td>
<td><strong>Post<br />
Estimate</strong></td>
<td><strong>Post<br />
Estimate<br />
New</strong></td>
<td><strong>USDA<br />
Official</strong></td>
<td><strong>Post<br />
Estimate</strong></td>
<td><strong>Post<br />
Estimate<br />
New</strong></td>
<td><strong>USDA<br />
Official</strong></td>
<td><strong>Post<br />
Estimate</strong></td>
<td><strong>Post<br />
Estimate<br />
New</strong></td>
</tr>
<tr class="even">
<td><strong>Market Year Begin</strong></td>
<td></td>
<td>08.2004</td>
<td>08.2004</td>
<td></td>
<td>08.2005</td>
<td>08.2005</td>
<td></td>
<td>08.2006</td>
<td>08.2006</td>
</tr>
<tr class="odd">
<td><strong>Area Planted</strong></td>
<td>0</td>
<td>700</td>
<td>0</td>
<td>0</td>
<td>580</td>
<td>0</td>
<td>0</td>
<td>700</td>
<td>670</td>
</tr>
<tr class="even">
<td><strong>Area Harvested</strong></td>
<td>700</td>
<td>700</td>
<td>680</td>
<td>600</td>
<td>580</td>
<td>560</td>
<td>700</td>
<td>700</td>
<td>640</td>
</tr>
<tr class="odd">
<td><strong>Beginning Stocks</strong></td>
<td>1478</td>
<td>993</td>
<td>993</td>
<td>1790</td>
<td>1268</td>
<td>1267</td>
<td>1690</td>
<td>1038</td>
<td>1285</td>
</tr>
<tr class="even">
<td><strong>Production</strong></td>
<td>4150</td>
<td>4134</td>
<td>4134</td>
<td>3550</td>
<td>3445</td>
<td>3445</td>
<td>4150</td>
<td>4134</td>
<td>4016</td>
</tr>
<tr class="odd">
<td><strong>Imports</strong></td>
<td>3414</td>
<td>3411</td>
<td>3411</td>
<td>3450</td>
<td>3123</td>
<td>3416</td>
<td>2550</td>
<td>2756</td>
<td>3442</td>
</tr>
<tr class="even">
<td><strong>MY Imports from U.S.</strong></td>
<td>0</td>
<td>2092</td>
<td>2092</td>
<td>0</td>
<td>1837</td>
<td>1894</td>
<td>0</td>
<td>1699</td>
<td>2065</td>
</tr>
<tr class="odd">
<td><strong>Total Supply</strong></td>
<td>9042</td>
<td>8538</td>
<td>8538</td>
<td>8790</td>
<td>7836</td>
<td>8128</td>
<td>8390</td>
<td>7928</td>
<td>8743</td>
</tr>
<tr class="even">
<td><strong>Exports</strong></td>
<td>152</td>
<td>152</td>
<td>152</td>
<td>200</td>
<td>138</td>
<td>183</td>
<td>150</td>
<td>276</td>
<td>183</td>
</tr>
<tr class="odd">
<td><strong>Use</strong></td>
<td>7100</td>
<td>7119</td>
<td>7119</td>
<td>6900</td>
<td>6660</td>
<td>6660</td>
<td>6700</td>
<td>6545</td>
<td>7229</td>
</tr>
<tr class="even">
<td><strong>Loss</strong></td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
<td>0</td>
</tr>
<tr class="odd">
<td><strong>Total Dom. Cons.</strong></td>
<td>7100</td>
<td>7119</td>
<td>7119</td>
<td>6900</td>
<td>6660</td>
<td>6660</td>
<td>6700</td>
<td>6545</td>
<td>7229</td>
</tr>
<tr class="even">
<td><strong>Ending Stocks</strong></td>
<td>1790</td>
<td>1268</td>
<td>1267</td>
<td>1690</td>
<td>1038</td>
<td>1285</td>
<td>1540</td>
<td>1107</td>
<td>1331</td>
</tr>
<tr class="odd">
<td><strong>Total Distribution</strong></td>
<td>9042</td>
<td>8539</td>
<td>8538</td>
<td>8790</td>
<td>7836</td>
<td>8128</td>
<td>8390</td>
<td>7928</td>
<td>8743</td>
</tr>
<tr class="even">
<td><strong>Stock to Use %</strong></td>
<td>24,68285</td>
<td>17,43914</td>
<td>17,42539</td>
<td>23,80282</td>
<td>15,2692</td>
<td>18,77831</td>
<td>22,48175</td>
<td>16,22929</td>
<td>17,95737</td>
</tr>
<tr class="odd">
<td><strong>Yield (kg/ hectare)</strong></td>
<td>1291</td>
<td>1286</td>
<td>1324</td>
<td>1288</td>
<td>1293</td>
<td>1339</td>
<td>1291</td>
<td>1286</td>
<td>1366</td>
</tr>
</tbody>
</table>

# Import Trade Matrix, Cotton

+----------------------+------------+------------------+--------------+
| **Import**           |            |                  |              |
|                      |            |                  |              |
| **Trade Matrix**     |            |                  |              |
+----------------------+------------+------------------+--------------+
| **Country**          | Turkey     |                  |              |
+----------------------+------------+------------------+--------------+
| **Commodity**        | Cotton     | **Units:**       | **Metric     |
|                      |            |                  | tons**       |
+----------------------+------------+------------------+--------------+
| Time Period          | Aug/July   |                  | Aug/July     |
+----------------------+------------+------------------+--------------+
| Imports for:         | MY 2004    |                  | **MY 2005**  |
+----------------------+------------+------------------+--------------+
| U.S.                 | 455414     | U.S.             | 412761       |
+----------------------+------------+------------------+--------------+
| Others               |            | Others           |              |
+----------------------+------------+------------------+--------------+
| Greece               | 158715     | Greece           | 188522       |
+----------------------+------------+------------------+--------------+
| Syria                | 48780      | Syria            | 45868        |
+----------------------+------------+------------------+--------------+
| Uzbekistan           | 15874      | Total C.I.S.     | 39986        |
+----------------------+------------+------------------+--------------+
| Turkmenistan         | 14478      | Free Z. Turkey   | 10578        |
+----------------------+------------+------------------+--------------+
| Israel               | 9009       | Brazil           | 6572         |
+----------------------+------------+------------------+--------------+
| Egypt                | 7718       | Egypt            | 6005         |
+----------------------+------------+------------------+--------------+
| Mersin Free Zone     | 4704       | W. Africa        | 4724         |
+----------------------+------------+------------------+--------------+
| Azerbaijan           | 4186       | Israel           | 3527         |
+----------------------+------------+------------------+--------------+
| Uganda               | 3940       | Australia        | 509          |
+----------------------+------------+------------------+--------------+
| Kazakhstan           | 2965       |                  |              |
+----------------------+------------+------------------+--------------+
| Total for Others     | 270369     |                  | 306291       |
+----------------------+------------+------------------+--------------+
| Others not Listed    | 16952      |                  | 25160        |
+----------------------+------------+------------------+--------------+
| Grand Total          | 742735     |                  | 744212       |
+----------------------+------------+------------------+--------------+
|                      |            |                  |              |
+----------------------+------------+------------------+--------------+
|                      |            | **Units:**       | **Bales**    |
+----------------------+------------+------------------+--------------+
| Time Period          | Aug/July   |                  | Aug/July     |
+----------------------+------------+------------------+--------------+
| Imports for:         | MY 2004    |                  | **MY 2005**  |
+----------------------+------------+------------------+--------------+
| U.S.                 | 2090350    | U.S.             | 1894573      |
+----------------------+------------+------------------+--------------+
| Others               |            | Others           |              |
+----------------------+------------+------------------+--------------+
| Greece               | 728501     | Greece           | 865316       |
+----------------------+------------+------------------+--------------+
| Syria                | 223900     | Syria            | 210534       |
+----------------------+------------+------------------+--------------+
| Uzbekistan           | 72861      | Total CIS        | 183536       |
+----------------------+------------+------------------+--------------+
| Turkmenistan         | 66454      | Free Z. Turkey   | 48553        |
+----------------------+------------+------------------+--------------+
| Israel               | 41351      | Brazil           | 30165        |
+----------------------+------------+------------------+--------------+
| Egypt                | 35425      | Egypt            | 27563        |
+----------------------+------------+------------------+--------------+
| Mersin Free Zone     | 21591      | W. Africa        | 21683        |
+----------------------+------------+------------------+--------------+
| Azerbaijan           | 19214      | Israel           | 16189        |
+----------------------+------------+------------------+--------------+
| Uganda               | 18084      | Australia        | 2336         |
+----------------------+------------+------------------+--------------+
| Kazakhstan           | 13609      |                  |              |
+----------------------+------------+------------------+--------------+
| Total for Others     | 1240990    |                  | 1405875      |
+----------------------+------------+------------------+--------------+
| Others not Listed    | 77810      |                  | 115484       |
+----------------------+------------+------------------+--------------+
| Grand Total          | 3409150    |                  | 3415932      |
+----------------------+------------+------------------+--------------+

# Export Trade Matrix, Cotton

  ---------------------- ------------- -------------------- -------------
  **Export Trade                                            
  Matrix**                                                  

  **Country**            Turkey                             

  **Commodity**          Cotton        **Units:**           **MT**

  Time Period            Aug/July                           Aug/May

  Exports for:           MY 2004                            **MY 2005**

  U.S.                                 U.S.                 200

  Others                               Others               

  Mersin Free Z.         5778          Turkey F Zones       17796

  Kayseri Free Z.        2326          Italy                5464

  Portugal               2025          Netherlands          2912

  Italy                  1780          Greece               1459

  Thailand               1446          France               1350

  Germany                615           Indonesia            1284

  Poland                 571           China                1194

  Pakistan               400           Portugal             968

  Vietnam                388           Pakistan             763

  Bangladesh             310           Hungry               706

  Total for Others       15639                              33896

  Others not Listed      17361                              3650

  Grand Total            33000                              37746

                                                            

                                       **Units:**           **Bales**

  Time Period            Aug/July                           Aug/May

  Exports for:           MY 2004                            **MY 2005**

  U.S.                                 U.S.                 918

  Others                               Others               

  Mersin Free Z.         26521         Turkey F Zones       81683

  Kayseri Free Z.        10676         Italy                25079

  Portugal               9294          Netherlands          13366

  Italy                  8170          Greece               2107

  Thailand               6637          France               6196

  Germany                2822          Indonesia            5893

  Poland                 2620          China                5480

  Pakistan               1836          Portugal             4443

  Vietnam                1780          Pakistan             3502

  Bangladesh             1423          Hungry               3240

  Total for Others       71783                              155583

  Others not Listed      79687                              16753

  Grand Total            151470                             173254
  ---------------------- ------------- -------------------- -------------