Turkish cotton demand rises, as textile industry modernises

25.08.2016

Turkish cotton consumption will hit a ten-year high next year, US officials said, as the country's cotton industry invests in new technology.

The US Department of Agriculture's bureau in Ankara saw Turkish textile exports rising thanks to increased sales in Europe, as well as thawing relations with Russia.

Domestic cotton consumption is expected to rise to 6.89m 480 pound bales in 2016-17, the bureau said, up 115,000 bales from the previous session.

This is 285,000 bales above the USDA's official 2016017 forecast.

Industry ups game

Political instability among many of Turkey's neighbours is forcing the industry to focus on competing in the European markets.

"War conditions in Syria, Iraq and Ukraine, and also stopping of exports to Russia after the Turkish downing of a Russian plane in November 2015 all caused exports to decline to these destinations," the bureau said.

"In the meantime, mills had to lower their margins to keep their market share in the European market to continue operating."

"Turkish mills have been investing in new machinery and technology to increase quality and lower costs in order to get ahead in the very competitive international textile trade," the bureau said.

Production surges

Turkish domestic production was forecast to surge by 21% year on year in 2016-17, to 3.21m bales.

This is the biggest crop since 2006-07.

This is even larger than the official USDA 2015-16 forecast, of 3.00m bales.

The bureau said that "ample irrigation water and high quality seeds used in recent years affected yields positively".

Imports fall, but not as fast as thought

The heavy production will shrink imports, but by less than expected, due to the robust demand.

The bureau saw imports at 4.02m bales in 2016-17, down from 4.13m bales in the previous season.

This is some 216,000 tonnes above the USDA's official forecast.

US loses market share

But imports from the US will fall, relative to other destinations, due to anti-dumping legislation.

"After a lengthy antidumping investigation, Government of Turkey announced three percent antidumping duty on the US cotton imports starting from April 2016," the bureau said.

But the US will remain the top seller to Turkey.

"The industry feels this is somewhat tolerable since some of the US cotton will come under the inward processing regime for exports and hence will not be subject to the antidumping duy," the bureau said.
    

 


agrimoney

Readers choice: TOP-5 articles of the month by UkrAgroConsult