Required Report - public distribution

**Date:** 5/23/2006

**GAIN Report Number:** TU6026

TU6026

**Turkey**

**Tomatoes and Products**

**Annual**

**2006**

**Approved by:**

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

U.S. Embassy

**Prepared by:**

Ibrahim Sirtioglu, Agricultural Marketing Specialist

**Report Highlights:**

MY 2006 fresh tomato (table and industrial) production is projected to
be 9.9 MMT. MY 2006 tomato paste production is expected to decline to
250,000 MT. A minor decline in both commodities is due to a decline in
industrial tomato production. Exports of fresh tomatoes continue to
increase in MY 2005, reaching 250,000 MT. Tomato paste exports, however,
are expected to decline to 160,000 MT due to the strong Turkish lira and
competition from other producers, such as China and Iran.

Includes PSD Changes: Yes

Includes Trade Matrix: Yes

Annual Report

Ankara \[TU1\]

\[TU\]

Table of Contents

[Executive Summary 3](#executive-summary)

[Production 4](#production)

[Prices 4](#prices)

[PSD, Fresh Tomatoes 5](#psd-fresh-tomatoes)

[PSD, Tomato paste 5](#psd-tomato-paste)

[Consumption 6](#consumption)

[Trade 6](#trade)

[Export TM, Fresh tomatoes 7](#export-tm-fresh-tomatoes)

[Export TM, Tomato Paste 8](#export-tm-tomato-paste)

[Stocks 8](#stocks)

[Policy 8](#policy)

[Import policy 8](#import-policy)

# Executive Summary

MY 2005 total tomato production is now estimated to be about 10 MMT, up
about six percent compared to a year ago due to increase in fresh tomato
production. In MY 2006, however, total tomato production is forecast to
decline to 9.9 MMT due to the decline in industrial tomato production.
Farmers who were offered twenty percent less than last year's price for
industrial tomatoes despite the eight percent annual inflation and
increased cost of fuel and fertilizer, switched to crops with better
returns, such as red peppers and corn and planted fewer industrial
tomatoes. Cooler than usual and rainy weather in the leading industrial
tomato regions delayed planting and made crop vulnerable to possible bad
weather in October. Turkish MY 2006 tomato paste production is expected
to decline about seven percent to 250,000 MT compared to 270,000 MT in
MY 2005 due to low world tomato paste prices of the last few years.

The official statistics show that Turkey exported 250,000 MT of fresh
tomatoes in MY 2005, up about six percent compared to a year ago. Russia
(99,000 MT), Romania (27,000 MT) and Saudi Arabia (23,000 MT) continued
to be the leading markets for Turkish fresh tomatoes. Turkish tomato
paste exports during the first seven months of the marketing year
remained at around 77,000 MT due to the over-valued Turkish Lira
preventing Turkish processors from effectively competing in
international markets. Iraq (15,000 MT) remained the leading market for
Turkish tomato paste exports. Japan (13,000 MT), Saudi Arabia (6,500 MT)
and Russia (3,500 MT) are still important markets for Turkish paste
exports. The sudden devaluation of the Turkish Lira against the major
currencies during first two weeks of May 2006 is expected to help
Turkish paste exports reach the year-end target of 160,000 MT.

# Production

MY 2006 total tomato production (table/fresh and industrial) is expected
to decline slightly to 9.9 MMT compared to 10 MMT of MY 2005. The
decline in total production is due to the decline in industrial tomato
production during the last three years. Lower than expected prices for
industrial tomatoes and better returns for alternative crops such as red
peppers and corn in industrial tomato growing regions are reasons for
the decrease.

MY 2006 industrial tomatoes are currently at the planting stage and
cooler than usual weather and on-going rains delayed the planting for
two weeks. A late planting will shorten the season and make the crop
vulnerable to October weather conditions that might prevent third
picking and affect total yield. Tomatoes are grown throughout Turkey,
but the bulk of production is concentrated in the Marmara and Aegean
regions where climatic conditions are nearly ideal. The greenhouse fresh
tomato production in the southern part of Turkey is increasing to meet
the demand from the urban areas and the export markets in winter.

Tomatoes produced for processing comprise about 20 percent of Turkey's
total production, while the remainder is destined for fresh consumption.
Processing tomatoes are grown mainly in the townships of Balikesir and
Canakkale in the Marmara region, Bergama and Turgutlu in the Aegean
region and also in newly emerging areas of Tokat in Central Anatolia,
where the processing industry is located. Processors are searching for
new production areas due to the decrease in yields in the traditional
industrial tomato growing regions.

Wide varieties of fresh and industrial tomatoes are grown in Turkey.
There are about four hundred fresh tomato seed varieties and sixty
industrial seed varieties approved by the Ministry of Agriculture.
Sabrina, Dalmone, Gigante and Fantastic 144 are some of the leading
fresh varieties and New Crimson, Delicious Red, Bonanza and Rio Grande
are among the leading industrial varieties.

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 = YTL 1.5)

For 2006, industrial tomato processors are reportedly offering YTL 80
per kilogram delivered to the factory. The price offered to farmers has
remained the same for the last two years despite the eight percent
annual inflation rate. Farmers are reportedly upset with the prices and
are either switching to other crops or producing industrial tomatoes
without a contract with the expectation of price increases at the end of
the season. Processors are giving technical assistance to farmers to use
drip-irrigation to increase their yield per hectare and make industrial
tomato production more attractive.

Canned tomato paste currently retails for about YTL 2.20 per kilogram,
which also remains unchanged over the last two years despite the eight
percent annual domestic inflation. Processors and retailers benefiting
from lower interest rates, down to 12 percent from 42 percent two years
ago, were able to keep prices as they were.

#  PSD, Fresh Tomatoes

+---------------+--------+--------+--------+--------+--------+--------+
| Turkey        |        |        |        |        |        |        |
|               |        |        |        |        |        |        |
| Fresh         |        |        |        |        |        |        |
| Tomatoes      |        |        |        |        |        |        |
|               |        |        |        |        |        |        |
| (HA) (MT)     |        |        |        |        |        |        |
+---------------+--------+--------+--------+--------+--------+--------+
|               | **     | **Rev  | **     | **Esti | **     | **Fore |
|               | 2004** | ised** | 2005** | mate** | 2006** | cast** |
+---------------+--------+--------+--------+--------+--------+--------+
|               | **USDA | **Post | **USDA | **Post | **USDA | **Post |
|               | Of     | Esti   | Of     | Esti   | Of     | Esti   |
|               | ficial | mate** | ficial | mate** | ficial | mate** |
|               | \[O    |        | \[O    |        | \[O    |        |
|               | ld\]** | **\[N  | ld\]** | **\[N  | ld\]** | **\[N  |
|               |        | ew\]** |        | ew\]** |        | ew\]** |
+---------------+--------+--------+--------+--------+--------+--------+
| Market Year   |        | 0      |        | 0      |        | 0      |
| Begin         |        | 1/2004 |        | 1/2005 |        | 1/2006 |
+---------------+--------+--------+--------+--------+--------+--------+
| **Plnt For    | 151000 | 151000 | 157300 | 157300 | 0      | 163000 |
| Fresh         |        |        |        |        |        |        |
| Consump**     |        |        |        |        |        |        |
+---------------+--------+--------+--------+--------+--------+--------+
| **Plnt For    | 38000  | 38000  | 36700  | 36700  | 0      | 35000  |
| Processing**  |        |        |        |        |        |        |
+---------------+--------+--------+--------+--------+--------+--------+
| **TOTAL Area  | 189000 | 189000 | 194000 | 194000 | 0      | 198000 |
| Planted**     |        |        |        |        |        |        |
+---------------+--------+--------+--------+--------+--------+--------+
| **Harv. For   | 151000 | 151000 | 157300 | 163500 | 0      | 163000 |
| Fresh Cons.** |        |        |        |        |        |        |
+---------------+--------+--------+--------+--------+--------+--------+
| **Harv. For   | 38000  | 38000  | 36700  | 37200  | 0      | 35000  |
| Processing**  |        |        |        |        |        |        |
+---------------+--------+--------+--------+--------+--------+--------+
| **TOTAL Area  | 189000 | 189000 | 194000 | 200700 | 0      | 198000 |
| Harvested**   |        |        |        |        |        |        |
+---------------+--------+--------+--------+--------+--------+--------+
| **Fresh Sale  | 7      | 7      | 7      | 8      | 0      | 8      |
| Production**  | 530000 | 530000 | 865000 | 190000 |        | 150000 |
+---------------+--------+--------+--------+--------+--------+--------+
| **Processing  | 1      | 1      | 1      | 1      | 0      | 1      |
| Production**  | 910000 | 910000 | 835000 | 860000 |        | 750000 |
+---------------+--------+--------+--------+--------+--------+--------+
| **TOTAL       | 9      | 9      | 9      | 10     | 0      | 9      |
| Production**  | 440000 | 440000 | 700000 | 050000 |        | 900000 |
+---------------+--------+--------+--------+--------+--------+--------+
| TOTAL SUPPLY  | 9      | 9      | 9      | 10     | 0      | 9      |
|               | 440000 | 440000 | 700000 | 050000 |        | 900000 |
+---------------+--------+--------+--------+--------+--------+--------+

# 

# PSD, Tomato paste

+----------------+--------+--------+--------+--------+--------+--------+
| Turkey         |        |        |        |        |        |        |
|                |        |        |        |        |        |        |
| Tomato Paste,  |        |        |        |        |        |        |
| 28-30% TSS     |        |        |        |        |        |        |
| Basis          |        |        |        |        |        |        |
|                |        |        |        |        |        |        |
| (MT) (MT, Net  |        |        |        |        |        |        |
| Weight)        |        |        |        |        |        |        |
+----------------+--------+--------+--------+--------+--------+--------+
|                | **     | **Rev  | **     | **Esti | **     | **Fore |
|                | 2004** | ised** | 2005** | mate** | 2006** | cast** |
+----------------+--------+--------+--------+--------+--------+--------+
|                | **USDA | **Post | **USDA | **Post | **USDA | **Post |
|                | Of     | Esti   | Of     | Esti   | Of     | Esti   |
|                | ficial | mate** | ficial | mate** | ficial | mate** |
|                | \[O    |        | \[O    |        | \[O    |        |
|                | ld\]** | **\[N  | ld\]** | **\[N  | ld\]** | **\[N  |
|                |        | ew\]** |        | ew\]** |        | ew\]** |
+----------------+--------+--------+--------+--------+--------+--------+
| Market Year    |        | 0      |        | 0      |        | 0      |
| Begin          |        | 9/2004 |        | 9/2005 |        | 9/2006 |
+----------------+--------+--------+--------+--------+--------+--------+
| **Deliv. To    | 1      | 1      | 1      | 1      | 0      | 1      |
| Processors**   | 800000 | 750000 | 700000 | 700000 |        | 500000 |
+----------------+--------+--------+--------+--------+--------+--------+
| **Beginning    | 29446  | 29446  | 21946  | 13756  | 11946  | 8756   |
| Stocks**       |        |        |        |        |        |        |
+----------------+--------+--------+--------+--------+--------+--------+
| **Production** | 270000 | 280000 | 260000 | 270000 | 0      | 250000 |
+----------------+--------+--------+--------+--------+--------+--------+
| **Imports**    | 0      | 0      | 0      | 0      | 0      | 0      |
+----------------+--------+--------+--------+--------+--------+--------+
| **TOTAL        | 299446 | 309446 | 281946 | 283756 | 11946  | 258756 |
| SUPPLY**       |        |        |        |        |        |        |
+----------------+--------+--------+--------+--------+--------+--------+
| **Exports**    | 165000 | 183190 | 155000 | 160000 | 0      | 140000 |
+----------------+--------+--------+--------+--------+--------+--------+
| **Domestic     | 112500 | 112500 | 115000 | 115000 | 0      | 115000 |
| Consumption**  |        |        |        |        |        |        |
+----------------+--------+--------+--------+--------+--------+--------+
| **Ending       | 21946  | 13756  | 11946  | 8756   | 0      | 3756   |
| Stocks**       |        |        |        |        |        |        |
+----------------+--------+--------+--------+--------+--------+--------+
| **TOTAL        | 299446 | 309446 | 281946 | 283756 | 0      | 258756 |
| DISTRIBUTION** |        |        |        |        |        |        |
+----------------+--------+--------+--------+--------+--------+--------+

# Consumption

About 80 percent of Turkey's total tomato production is consumed fresh
and the remainder is processed. Of the 20 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 ketchup,
tomato juice, dried tomatoes and other products. Total (nominal) tomato
paste production capacity is estimated at about 500,000 MT, assuming
three shifts per working day and a 60-day harvest. However, hot summer
weather often shortens the harvest, reducing actual capacity to about
375,000 MT.

There are about 45 firms in the industry, with seven or eight large
firms with an 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 industrial products yield (tomatoes to paste) is estimated at
about 6 kilograms of tomatoes for 1 kilogram of paste.

Commercial tomato paste production for MY 2006 is projected to be
250,000 MT, about seven percent less than last year. An over-valued
Turkish Lira, competition from other producing nations and low world
prices has 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 90 percent are diced
tomatoes and the rest are whole, peeled tomatoes. MY 2006 canned tomato
production is expected to remain about 30,000 MT (net weight basis) due
to increased competition in export markets.

## 

# Trade

MY 2005 Turkish fresh tomato exports were 250,000 MT, up from 235,000 MT
of MY 2004. Russia, Romania and Saudi Arabia continue to be the leading
markets for Turkish fresh tomato exports - combined exports constitute
about 61 percent of the annual total exports. Turkey also exported
47,000 MT of fresh tomatoes during the first three months of MY 2006 -
Russia was the leading buyer receiving two thirds of the exports.

MY 2005 tomato paste exports are now estimated to be about 160,000 MT
compared to 183,000 MT in MY 2004. A stronger Turkish Lira and
competition of other tomato paste producing countries were the main
reasons for the decline. Exports during the first seven months of the MY
2005 was about 77,000 MT, compared to 118,000 MT during the same period
in MY 2004. Iraq continues to be the leading importer.

Turkey continues to export the majority of its paste production. While
Iraq and Algeria

re-emerged as important customers, Japan, Saudi Arabia and Russia,
continue to be the leading export markets for Turkish tomato paste.
Turkey continues to face increasing competition from China and Iran in
these and other export markets. While China is competitive in the Far
East market, Iran competes with Turkish paste exports in the Middle East
and in Central Asia.

Since 1997, Turkey is not permitting tariff rate quota meat imports from
the E.U. in accordance with the mutual agricultural trade concessions
agreement and in return, the E.U. is not allowing Turkey to utilize its
30,000 MT tariff rate export quota for tomato paste. Out-of-quota
exports to E.U. are subject to 14.4 percent duty.

The strong Turkish currency seems to have also adversely affected canned
diced tomato exports since production fell to 25,000 MT in MY 2005
compared to 35,000 in MY 2004. Despite the downfall in exports, the E.U.
continues to be the leading export market for Turkish diced tomatoes.
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 lack of paste world wide moved prices up and Turkish tomato
paste FOB export price increased to USD 750 Per MT compared to USD 675
Per MT of last year.

# 

# Export TM, Fresh tomatoes

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

  **Country**                Turkey                          

  **Commodity**              Fresh Tomatoes                  

  Time Period                Jan/Dec          Units:         Metric tons

  Exports for:               CY 2004                         **CY 2005**

  U.S.                                        U.S.            

  Others                                      Others         

  Russia                     125754           Russia         102108

  S. Arabia                  33406            Romania        28008

  Romania                    17733            S. Arabia      22964

  Serbia                     12264            Moldova        10553

  Greece                     8494             Bosnia         10063

  Moldova                    6642             Serbia         9343

  Germany                    4229             Germany        6870

  Bosnia                     3514             Belarus        6065

  Macedonia                  3126             Greece         5390

  France                     3177             Slovenia       4992

  Total for Others           218339                          206356

  Others not Listed          17024                           43076

  Grand Total                235363                          249432

                                                             

                                                             

  Time Period                Jan/March                       

  Exports for:               CY 2006                         

  U.S.                                                       

  Others                                                     

  Russia                     30565                           

  Romania                    3765                            

  Moldova                    2109                            

  Bulgaria                   1945                            

  Germany                    818                             

  Belarus                    818                             

  Albania                    770                             

  Macedonia                  741                             

  Hungary                    696                             

  Netherlands                685                             

  Total for Others           42911                           

  Others not Listed          4560                            

  Grand Total                47471                           
  -------------------------- ---------------- -------------- --------------

# 

# 

# 

# Export TM, Tomato Paste 

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

  **Country**           Turkey                                     

  **Commodity**         Tomato                                     
                        Paste,                                     
                        28-30% TSS                                 
                        Basis                                      

  Time Period           Sept/Aug     Units:      Metric tons       

  Exports for:          MY 2004                  **MY 2005**       

  U.S.                  675          U.S.        122               

  Others                             Others                        

  Iraq                  28258        Iraq        15176             

  Japan                 21880        Japan       13571             

  Saudi Arabia          20164        S. Arabia   6667              

  Russia                19251        Russia      6300              

  Algeria               12661        Romania     5852              

  N. Cyprus             7960         Algeria     4766              

  Romania               6835         Germany     3788              

  Philippines           5695         Oman        3740              

  Kuwait                4255         Sudan       1874              

  Oman                  3810         Malaysia    1795              

  Total for Others      130769                   63529             

  Others not Listed     51746                    13466             

  Grand Total           183190                   77117             
  --------------------- ------------ ----------- ----------- -- -- ----------

# 

# Stocks

There are no official statistics on stocks for tomato and tomato
products. Industry sources estimate the 2005 marketing year-end stocks
at about 8,000 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 US\$ 68 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.

## Import policy

Turkish 2006 import regime did not change the import tax levels for
fresh tomatoes and paste. Accordingly, fresh tomato and tomato paste
imports are subject to 48.6 and 135.9 percent import taxes,
respectively.