Required Report - public distribution

**Date:** 5/28/2004

**GAIN Report Number:** TU4019

TU4019

**Turkey**

**Tomatoes and Products**

**Annual Report**

**2004**

**Approved by:**

![](media/image1.wmf)Robert Hanson, Agricultural Attache

U.S. Embassy

**Prepared by:**

Ibrahim Sirtioglu, Agricultural Marketing Specialist

**Report Highlights:**

MY 2004 fresh tomato production is expected to decline to 8 MMT. MY 2004
tomato paste production is projected at 260,000 MT, which is about
twenty percent less than last year. Turkish tomato paste exports in the
first half of MY 2003 reached 95,300 MT and year-end exports are
expected to reach 170,000 MT. Turkey is still not allowed to utilize its
30,000 MT tariff rate quota for tomato paste due to the on-going dispute
over E.U. duty-free meat exports to Turkey.

Includes PSD Changes: Yes

Includes Trade Matrix: Yes

Annual Report

Ankara \[TU1\]

\[TU\]

Table of Contents

[**Executive Summary 3**](#refheading___toc44206933)

[Production 3](#production)

[Consumption 3](#consumption)

[Trade 4](#trade)

[Stocks 5](#stocks)

[Policy 5](#policy)

[]{#refheading___toc44206933 .anchor}**Executive Summary**

MY 2004 fresh tomato production is expected to decline to 8 MMT. Prior
to the planting season, farmers were not happy with the low industrial
tomato prices proposed to them by the processors. Better returns on
other crops such as corn and wheat led farmers to plant fewer industrial
tomatoes.

According to official statistics, Turkish tomato paste exports during
the first half of MY 2003 are 95,000 MT. Russia (13,025 MT), Saudi
Arabia (10,435 MT) and Japan (9,519 MT) continue to be the leading
markets for Turkish tomato paste exports. MY 2003 year-end exports are
expected to remain about 170,000 MT. During the first half of this
marketing year, the over-valued Turkish Lira prevented Turkish
processors from effectively competing in international markets. China
and Iran are reportedly competing with Turkish processors in Far Eastern
and Central Asian markets.

Industry resources estimate the 2003 marketing year-end stocks, at a
record high of about 44,000 MT. Processors are waiting for the Turkish
Lira to fluctuate and lose value against the US Dollar or for world
prices to increase in order to sell their stocks.

# Production

# 

# Total tomato production (table/fresh and industrial) for MY 2003 is now estimated at 8.4 million tons. The production increase was due to suitable weather during the season and high prices paid for industrial tomatoes by the processors. However, production is expected to decline to 8 million in MY 2004 due to lower than expected prices for industrial tomatoes and better returns for alternative crops in industrial tomato growing regions. 

# 

# Tomatoes are grown throughout Turkey, but the bulk of production is concentrated in the Marmara and Aegean regions where climatic conditions are nearly ideal. Recent trends in tomato production include increased greenhouse production in southern Turkey for fresh consumption in urban areas during the winter. 

# 

# Tomatoes produced for processing comprise about 25 percent of Turkey's total production, while the remainder is destined for fresh consumption. Processing tomatoes are grown mainly in the township of Balikesir and Canakkale in the Marmara region, Bergama and Turgutlu of the Aegean region and in newly emerging areas of Tokat of Central Anatolia, where the processing industry is located. 

# 

# Tomato production is labor intensive and the bulk of production occurs on small, family farms. Most planting continues to be done by hand. Seedlings are started around mid-March and are transplanted after the danger of frost has passed. Harvest of early varieties begins in late July, with the peak harvest occurring around mid-August. Growers generally begin to pick the crop when half of the field is ripe. Since all harvesting is done by hand, three or even four pickings are possible. Depending on the weather, hand picking can extend the harvest until early October. About eighty percent of the processing tomato crop is grown under commercial contract mainly with the larger tomato processors. The remaining twenty percent of the crop is grown independently for smaller processors, who generally do not contract, as well as to supply the home processing market. 

#  

# Prices

(Current exchange rate is approximately: USD 1 = TL 1,500,000)

For 2004 industrial tomatoe processors are reportedly offering TL
100,000 per kilogram delivered to the factory. The price offered to
farmers is the same as last year despite the ten percent annual
inflation rate. Farmers are reportedly upset with the prices and are
switching to other crops.

Canned tomato paste currently retails for about TL 2,200,000 per
kilogram, (which is the same as last year despite the ten percent annual
domestic inflation), due to abundant supplies and high local stocks.

# 

# Consumption

# 

# About 75 percent of the Turkey's total tomato production is consumed fresh and the remainder is processed. Of the 25 percent of the crop that is processed, about 85 percent is used to produce tomato paste, 10 percent is utilized for canned tomatoes, and the remainder is used for catsup, tomato juice, dried tomatoes and other products. Total (nominal) tomato paste production capacity is estimated at about 450,000 MT, assuming three shifts and a 60-day harvest. However, hot summer weather often shortens the harvest, reducing actual capacity to about 330,000 MT. 

# 

# There are about 45 firms in the industry, with seven of eight large firms (average annual tomato paste production of 15,000-20,000 MT) accounting for about seventy percent of total tomato paste production. Most large firms can process 2,000-3,000 MT of tomatoes daily. The industry products yield (tomatoes to paste) is estimated at about 6 kilograms of tomatoes for 1.0 kilogram of paste. 

Commercial tomato paste production for MY 2004 is projected to be
260,000 MT, or about twenty percent less than last year. High stocks, an
over-valued Turkish Lira, competition from other producing nations and
low world prices have forced processors to adopt a cautious approach and
cut production. In addition to commercial production, about 5,000 MT of
tomato paste is produced at home.

Turkey also produces processed tomatoes of which 95 percent are diced
tomatoes and the rest are whole, peeled tomatoes. MY 2004 canned tomato
production is expected to continue to increase and reach 32,000 MT (net
weight basis) due to increased export demand. (NOTE: PSD and Trade
Matrix attached for canned tomatoes are total of diced and whole peeled
tomatoes and the great majority are packed in 180 kilograms drums.)

# Trade

## MY 2003 tomato paste exports are now estimated to be about 170,000 MT. Exports during the first half of the marketing year were 95,300 MT compared to 80,000 MT during the same period last year. MY 2004 exports are also forecast to remain at 170,000 MT.

The tomato paste industry is very dependent on exports. Russia, Saudi
Arabia and Japan continue to be the leading export markets for Turkish
tomato paste producers. Other traditional markets such as Algeria and
Iraq are becoming important customers again while their economies and
political situations stabilize. Turkey is continuing to face increasing
competition of China and Iran in these and other export markets. While
China is competitive in the Far eastern market, Iran competes with
Turkish paste exports in the Middle East and Central Asia.

The E.U. is not permitting Turkey to utilize its 30,000 MT tariff rate
quota since 1997 due to a dispute over U.E. meat exports to Turkey.
Out-of-quota exports are subject to 14.4 percent duty.

Turkey also exports the majority of its annual 30,000 MT of diced tomato
production. The E.U. continues to be the leading export market. The E.U.
allows Turkey to utilize 8,400 MT of its tariff rate quota of diced
tomatoes but exports above the quota are subject to 14.4 percent import
tax.

The current Turkish tomato paste FOB export price is about USD 680 Per
MT.

# 

# Stocks

There are no official statistics on stocks for tomato and tomato
products. Industry sources estimate the 2003 marketing year-end stocks
at a record high of about 44,000 MT.

# Policy

The Agricultural Bank of Turkey is no longer able to provide subsidized
loans to agricultural producers and the government does not support
prices or otherwise assist tomato production. All production and
domestic and international marketing is handled by the private sector.
The GOT indirectly supports tomato paste exports by USD 65 per ton as a
form of tax deduction. If the tomato paste is produced under a contract
with farmers, an additional 40 percent (USD 26) is added to support of
which 32 percent of it is given to the farmers and 8 percent to the
processors.

# Tariff Changes

Turkey decreased its tariffs on canned tomatoes and tomato paste imports
slightly in 2004 to 135.9 percent.

+----------------+------+------+------+------+------+------+------+
| ###### Turkey  |      |      |      |      |      |      |      |
|                |      |      |      |      |      |      |      |
| Tom.           |      |      |      |      |      |      |      |
| Paste,28-30%   |      |      |      |      |      |      |      |
| TSS Basis      |      |      |      |      |      |      |      |
+----------------+------+------+------+------+------+------+------+
|                |      |      |      |      |      |      |      |
+----------------+------+------+------+------+------+------+------+
|                |      |      |      |      |      |      |      |
+----------------+------+------+------+------+------+------+------+
|                | **20 | **R  | **20 | **Es | **20 | **Fo | **U  |
|                | 02** | evis | 03** | tima | 04** | reca | OM** |
|                |      | ed** |      | te** |      | st** |      |
+----------------+------+------+------+------+------+------+------+
|                | **   | **   | **   | **   | **   | **   |      |
|                | USDA | Post | USDA | Post | USDA | Post |      |
|                | Offi | Esti | Offi | Esti | Offi | Esti |      |
|                | cial | mate | cial | mate | cial | mate |      |
|                | \    | \    | \    | \    | \    | \    |      |
|                | [Old | [New | [Old | [New | [Old | [New |      |
|                | \]** | \]** | \]** | \]** | \]** | \]** |      |
+----------------+------+------+------+------+------+------+------+
| **Market Year  |      | 09.  |      | 09.  |      | 09.  | MM/  |
| Begin**        |      | 2002 |      | 2003 |      | 2004 | YYYY |
+----------------+------+------+------+------+------+------+------+
| **Deliv. To    | 170  | 170  | 185  | 193  | 0    | 156  | (MT) |
| Processors**   | 0000 | 0000 | 0000 | 0000 |      | 0000 |      |
+----------------+------+------+------+------+------+------+------+
| **Beginning    | 5290 | 5290 | 7790 | 4369 | 1    | 4    | (MT, |
| Stocks**       |      |      |      |      | 2790 | 4369 | Net  |
|                |      |      |      |      |      |      | Wei  |
|                |      |      |      |      |      |      | ght) |
+----------------+------+------+------+------+------+------+------+
| **Production** | 26   | 28   | 27   | 32   | 0    | 26   | (MT, |
|                | 5000 | 0000 | 5000 | 0000 |      | 0000 | Net  |
|                |      |      |      |      |      |      | Wei  |
|                |      |      |      |      |      |      | ght) |
+----------------+------+------+------+------+------+------+------+
| **Imports**    | 0    | 0    | 0    | 0    | 0    | 0    | (MT, |
|                |      |      |      |      |      |      | Net  |
|                |      |      |      |      |      |      | Wei  |
|                |      |      |      |      |      |      | ght) |
+----------------+------+------+------+------+------+------+------+
| **TOTAL        | 27   | 28   | 28   | 32   | 1    | 30   | (MT, |
| SUPPLY**       | 0290 | 5290 | 2790 | 4369 | 2790 | 4369 | Net  |
|                |      |      |      |      |      |      | Wei  |
|                |      |      |      |      |      |      | ght) |
+----------------+------+------+------+------+------+------+------+
| **Exports**    | 15   | 17   | 16   | 17   | 0    | 17   | (MT, |
|                | 5000 | 8421 | 0000 | 0000 |      | 0000 | Net  |
|                |      |      |      |      |      |      | Wei  |
|                |      |      |      |      |      |      | ght) |
+----------------+------+------+------+------+------+------+------+
| **Domestic     | 10   | 10   | 11   | 11   | 0    | 11   | (MT, |
| Consumption**  | 7500 | 2500 | 0000 | 0000 |      | 2500 | Net  |
|                |      |      |      |      |      |      | Wei  |
|                |      |      |      |      |      |      | ght) |
+----------------+------+------+------+------+------+------+------+
| **Ending       | 7790 | 4369 | 1    | 4    | 0    | 2    | (MT, |
| Stocks**       |      |      | 2790 | 4369 |      | 1869 | Net  |
|                |      |      |      |      |      |      | Wei  |
|                |      |      |      |      |      |      | ght) |
+----------------+------+------+------+------+------+------+------+
| **TOTAL        | 27   | 28   | 28   | 32   | 0    | 30   | (MT, |
| DISTRIBUTION** | 0290 | 5290 | 2790 | 4369 |      | 4369 | Net  |
|                |      |      |      |      |      |      | Wei  |
|                |      |      |      |      |      |      | ght) |
+----------------+------+------+------+------+------+------+------+

+----------------------+-------------------------------+-----+--------+---+
| #######              |                               |     |        |   |
|  Export Trade Matrix |                               |     |        |   |
+----------------------+-------------------------------+-----+--------+---+
| Turkey               |                               |     |        |   |
|                      |                               |     |        |   |
| Tom. Paste,28-30%    |                               |     |        |   |
| TSS Basis            |                               |     |        |   |
+----------------------+-------------------------------+-----+--------+---+
| # Time Period        | **MY2003**                    | *   | **     |   |
|                      |                               | *Un | Metric |   |
|                      |                               | its | tons** |   |
|                      |                               | :** |        |   |
+----------------------+-------------------------------+-----+--------+---+
| **Exports for:**     | **Sept/Feb**                  |     | **#VA  |   |
|                      |                               |     | LUE!** |   |
+----------------------+-------------------------------+-----+--------+---+
| **U.S.**             | 86                            | U   |        |   |
|                      |                               | .S. |        |   |
+----------------------+-------------------------------+-----+--------+---+
| **Others**           |                               | Oth |        |   |
|                      |                               | ers |        |   |
+----------------------+-------------------------------+-----+--------+---+
| **Russia**           | 13025                         |     |        |   |
+----------------------+-------------------------------+-----+--------+---+
| **Algeria**          | 10435                         |     |        |   |
+----------------------+-------------------------------+-----+--------+---+
| **S. Arabia**        | 10430                         |     |        |   |
+----------------------+-------------------------------+-----+--------+---+
| **Japan**            | 9519                          |     |        |   |
+----------------------+-------------------------------+-----+--------+---+
| **Germany**          | 7668                          |     |        |   |
+----------------------+-------------------------------+-----+--------+---+
| **Malaysia**         | 3520                          |     |        |   |
+----------------------+-------------------------------+-----+--------+---+
| **Kuwait**           | 3428                          |     |        |   |
+----------------------+-------------------------------+-----+--------+---+
| **Iraq**             | 2751                          |     |        |   |
+----------------------+-------------------------------+-----+--------+---+
| **Sudan**            | 2226                          |     |        |   |
+----------------------+-------------------------------+-----+--------+---+
| **Oman**             | 2225                          |     |        |   |
+----------------------+-------------------------------+-----+--------+---+
| **Total for Others** | 65227                         |     | 0      |   |
+----------------------+-------------------------------+-----+--------+---+
| **Others not         | 29994                         |     |        |   |
| Listed**             |                               |     |        |   |
+----------------------+-------------------------------+-----+--------+---+
| **Grand Total**      | 95307                         |     | 0      |   |
+----------------------+-------------------------------+-----+--------+---+

+---------------+------+------+------+------+------+------+------+
| PSD Table     |      |      |      |      |      |      |      |
|               |      |      |      |      |      |      |      |
| Turkey        |      |      |      |      |      |      |      |
|               |      |      |      |      |      |      |      |
| Tomatoes,     |      |      |      |      |      |      |      |
| Canned        |      |      |      |      |      |      |      |
+---------------+------+------+------+------+------+------+------+
|               |      |      |      |      |      |      |      |
+---------------+------+------+------+------+------+------+------+
|               |      |      |      |      |      |      |      |
+---------------+------+------+------+------+------+------+------+
|               | **20 | **R  | **20 | **Es | **20 | **Fo | **U  |
|               | 02** | evis | 03** | tima | 04** | reca | OM** |
|               |      | ed** |      | te** |      | st** |      |
+---------------+------+------+------+------+------+------+------+
|               | **   | **   | **   | **   | **   | **   |      |
|               | USDA | Post | USDA | Post | USDA | Post |      |
|               | Offi | Esti | Offi | Esti | Offi | Esti |      |
|               | cial | mate | cial | mate | cial | mate |      |
|               | \    | \    | \    | \    | \    | \    |      |
|               | [Old | [New | [Old | [New | [Old | [New |      |
|               | \]** | \]** | \]** | \]** | \]** | \]** |      |
+---------------+------+------+------+------+------+------+------+
| **Market Year |      | **0  |      | **0  |      | **0  | #### |
| Begin**       |      | 9.20 |      | 9.20 |      | 9.20 | #### |
|               |      | 02** |      | 03** |      | 04** |  MM/ |
|               |      |      |      |      |      |      | YYYY |
+---------------+------+------+------+------+------+------+------+
| **Deliv. To   | 0    | 2    | 0    | 3    | 0    | 2    | (MT) |
| Processors**  |      | 7000 |      | 3500 |      | 8000 |      |
+---------------+------+------+------+------+------+------+------+
| **Beginning   | 0    | 1000 | 0    | 2000 | 0    | 2000 | (MT, |
| Stocks**      |      |      |      |      |      |      | Net  |
|               |      |      |      |      |      |      | Wei  |
|               |      |      |      |      |      |      | ght) |
+---------------+------+------+------+------+------+------+------+
| *             | 0    | 2    | 0    | 2    | 0    | 3    | (MT, |
| *Production** |      | 3000 |      | 9000 |      | 2000 | Net  |
|               |      |      |      |      |      |      | Wei  |
|               |      |      |      |      |      |      | ght) |
+---------------+------+------+------+------+------+------+------+
| **Imports**   | 0    | 0    | 0    | 0    | 0    | 0    | (MT, |
|               |      |      |      |      |      |      | Net  |
|               |      |      |      |      |      |      | Wei  |
|               |      |      |      |      |      |      | ght) |
+---------------+------+------+------+------+------+------+------+
| **TOTAL       | 0    | 2    | 0    | 3    | 0    | 3    | (MT, |
| SUPPLY**      |      | 4000 |      | 1000 |      | 4000 | Net  |
|               |      |      |      |      |      |      | Wei  |
|               |      |      |      |      |      |      | ght) |
+---------------+------+------+------+------+------+------+------+
| **Exports**   | 0    | 2    | 0    | 2    | 0    | 2    | (MT, |
|               |      | 0000 |      | 6500 |      | 9000 | Net  |
|               |      |      |      |      |      |      | Wei  |
|               |      |      |      |      |      |      | ght) |
+---------------+------+------+------+------+------+------+------+
| **Domestic    | 0    | 2000 | 0    | 2500 | 0    | 3000 | (MT, |
| Consumption** |      |      |      |      |      |      | Net  |
|               |      |      |      |      |      |      | Wei  |
|               |      |      |      |      |      |      | ght) |
+---------------+------+------+------+------+------+------+------+
| **Ending      | 0    | 2000 | 0    | 2000 | 0    | 2000 | (MT, |
| Stocks**      |      |      |      |      |      |      | Net  |
|               |      |      |      |      |      |      | Wei  |
|               |      |      |      |      |      |      | ght) |
+---------------+------+------+------+------+------+------+------+
| **TOTAL       | 0    | 2    | 0    | 3    | 0    | 3    | (MT, |
| D             |      | 4000 |      | 1000 |      | 4000 | Net  |
| ISTRIBUTION** |      |      |      |      |      |      | Wei  |
|               |      |      |      |      |      |      | ght) |
+---------------+------+------+------+------+------+------+------+

+------------------------------+----------------------+-----+---------+
| Export Trade Matrix          |                      |     |         |
|                              |                      |     |         |
| Turkey                       |                      |     |         |
|                              |                      |     |         |
| Tomatoes, Canned             |                      |     |         |
+------------------------------+----------------------+-----+---------+
| # Time Period                | ######## MY 2003     | *   | *       |
|                              |                      | *Un | *Metric |
|                              |                      | its | tons**  |
|                              |                      | :** |         |
+------------------------------+----------------------+-----+---------+
| **Exports for:**             | **Sept/Feb**         |     | **#V    |
|                              |                      |     | ALUE!** |
+------------------------------+----------------------+-----+---------+
| **U.S.**                     | 71                   | U   |         |
|                              |                      | .S. |         |
+------------------------------+----------------------+-----+---------+
| **Others**                   |                      | Oth |         |
|                              |                      | ers |         |
+------------------------------+----------------------+-----+---------+
| **United Kingdom**           | 6427                 |     |         |
+------------------------------+----------------------+-----+---------+
| **Japan**                    | 2834                 |     |         |
+------------------------------+----------------------+-----+---------+
| **Netherlands**              | 2123                 |     |         |
+------------------------------+----------------------+-----+---------+
| **Ireland**                  | 1771                 |     |         |
+------------------------------+----------------------+-----+---------+
| **Australia**                | 1221                 |     |         |
+------------------------------+----------------------+-----+---------+
| **France**                   | 1092                 |     |         |
+------------------------------+----------------------+-----+---------+
| **Italy**                    | 1004                 |     |         |
+------------------------------+----------------------+-----+---------+
| **Germany**                  | 805                  |     |         |
+------------------------------+----------------------+-----+---------+
| **Switzerland**              | 649                  |     |         |
+------------------------------+----------------------+-----+---------+
| **Costa Rica**               | 400                  |     |         |
+------------------------------+----------------------+-----+---------+
| **Total for Others**         | 18326                |     | 0       |
+------------------------------+----------------------+-----+---------+
| **Others not Listed**        | 1023                 |     |         |
+------------------------------+----------------------+-----+---------+
| **Grand Total**              | 19420                |     | 0       |
+------------------------------+----------------------+-----+---------+