Cotton Products Update May 2011

An Expert's View about Textiles in Turkey

Last updated: 15 Jun 2011

The MY 2011 Turkish cotton crop area and production are now estimated about 450,000 hectares and 630,000 MT (2.9 million bales).

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Voluntary Public - Date: 5/27/2011 Turkey Post: Ankara Turkey Cotton Products Update May 2011 Report Categories: Cotton and Products Approved By: Rachel Nelson Prepared By: Ibrahim Sirtioglu Report Highlights: The MY 2011 Turkish cotton crop area and production are now estimated about 450,000 hectares and 630,000 MT (2.9 million bales). Record high world cotton prices caused farmers to plant cotton but continued rains during the planting season delayed planting, which will cause a drop in yields. MY 2010 total consumption is expected to decline to 1.2 MMT (5.5 million bales), however, as a result of high prices. Year-end imports are estimated to remain at about 700,000 MT (3.2 Million bales). Imports during the first eight months of MY 2010 reached 521,000 MT (2.4 million bales), of which U.S. cotton constituted more than seventy percent. Production Country wide continuous rains during pril and first half of May had prevented cotton planting. Farmers were able to plant during the second half of May, about a month later than usual. Late planting will cause many problems in picking, ginning and quality since cotton will be vulnerable to rains in the fall. MY 2011 cotton area and production are now estimated to be about 450,000 hectares and 630,000 MT (2.98 million bales). It is reported that attractive world prices persuaded farmers not to plant winter grains such as wheat and corn in cotton growing areas, hence domestic cotton planting is expected to increase about forty-five percent in MY 2011. Record world cotton prices persuaded farmers to plant cotton despite the uncertainty about the cotton production bonus for the crop year. GOT announced crop production bonuses for other crops under the program about two months ago with the exception of seed cotton. Following repeated requests from farm groups, the Agricultural Minister unofficially released last weekend that the production bonus for seed cotton will be 0.42 per kilogram, the same as last year. Consumption MY 2010 domestic cotton consumption is now estimated to be about 1.20 MMT (5.5 million bales). Record high world cotton prices increased the cost of textile production and caused a decline in orders. It is reported that reduced orders have caused exports to decline, particularly from Southern European countries due to the economic slowdown and Middle Eastern countries due to political turmoil. As export demand fell, the sudden decline in cotton prices caused some mills to get caught with high cost raw material stocks, making it harder to compete with low cost imports. Additionally, a decree was announced in January which will increase import duties for textile and garment imports to 20 and 30 percent, respectively, starting on July 21, 2011. Even though the decree is expected to increase utilization of locally produced material in textiles, high local prices persuaded local garment producers to rush to import raw materials from low cost countries before July 21. Accordingly, while imports of textiles and garments increased in recent months local mills are reported to have received very low orders in the last two months and some are reported to be considering temporary closures. High cotton yarn prices are also reported to have caused an increase in the usage of manmade fibers by the Turkish textile industry. Even though Turkish textile and garment exports still show 20 and 10 percent increases respectively, sources indicate that these increases are due to delivery of old orders and export growth soon will stop. It is also reported that some mills who ordered new machinery to increase capacity are trying to postpone their purchases. Mills are hoping for improvement in the overall economic situation in domestic and international markets and also the stabilization of world cotton prices with the new crop, to be able to work competitively again. Trade Turkey imported 512,310 MT (2.4 Million bales) of cotton during first eight months of MY 2010, of which 372,000 MT (1.7 Million bales) or seventy-one percent was U.S. cotton. Greece, the CIS countries, Brazil and India were the other suppliers to Turkey. Total year end imports are expected to remain at about 700,000 MT due to a decline in domestic consumption. GSM-102 credit guarantee program continues to play an important role in U.S. cotton sales to Turkey. During FY 2011 Turkish cotton importers bought US$ 235 million worth of U.S. cotton under the program, which represents about fifty-seven percent of total usage as of May 25, 2011. Turkish cotton exports during the same period were about 5,880 MT (27,000 bales), of which about 5,357 MT (24,590 bales) went to Turkish free trade zones. Some of the cotton in these zones may be imported back into the country. Turkey also exported about 16,130 MT of cotton for medical use during the same period. Production, Supply and Demand Data Statistics : Cotton T 2009/2010 2010/2011 2011/2012 urkey Market Year Begin: Market Year Begin: Market Year Aug 2009 Aug 2010 Begin: Aug 2011 USDA New USDA New USDA New Official Post Official Post Official Post Area Planted 0 0 0 0 0 (1000 HA) Area Harvested 280 280 375 320 410 (1000 HA) Beginning Stocks 1,654 1,136 1,928 1,166 960 1000 480 lb. Bales Production 1,750 1,744 2,250 2,111 2,754 1000 480 lb. Bales Imports 4,394 4,391 3,100 3,442 3,672 1000 480 lb. Bales MY Imports from U.S. 2,290 2,236 0 2,295 2,065 1000 480 lb. Bales Total Supply 7,798 7,271 7,278 6,719 7,386 1000 480 lb. Bales Exports 150 46 150 23 46 1000 480 lb. Bales Use 5,800 6,059 5,900 5,736 6,196 1000 480 lb. Bales Loss -80 0 -80 0 1000 480 lb. Bales Total Dom. Cons. 5,720 6,059 5,820 5,736 6,196 1000 480 lb. Bales Ending Stocks 1,928 1,166 1,308 960 1,144 1000 480 lb. Bales Total Distribution 7,798 7,271 7,278 6,719 7,386 1000 480 lb. Bales Stock to Use % 32 19 22 17 18 (PERCENT) Yield 1,361. 1,356. 1,306. 1,436. 1,462. (KG/HA) TS=TD 0 0 0 PSD Table Country Turkey Commodity Cotton (HECTARES)( MT) 2009 Revised 2010 Estimate 2011 Forecast USDA USDA USDA Official Post Official Post Official Post [Old] Estimate[New] [Old] Estimate[New] [Old] Estimate[New] Market Year Begin Aug-09 Aug-10 11-Aug Area Planted 280000 280000 320000 320000 410000 450000 Area Harvested 280000 280000 320000 320000 410000 450000 Beginning Stocks 247433 247433 254068 254068 209068 206068 Production 380000 380000 460000 460000 600000 630000 Imports 956682 956682 750000 700000 800000 650000 MY Imp. from U.S. 487236 487236 500000 500000 500000 425000 TOTAL SUPPLY 1584115 1584115 1464068 1414068 1609068 1486068 Exports 10047 10047 5000 8000 10000 10000 USE Dom. Consumption 1320000 1320000 1250000 1200000 1350000 1250000 Loss Dom. Consumption 0 0 0 0 0 0 TOTAL Dom. Consumption 1320000 1320000 1250000 1200000 1350000 1250000 Ending Stocks 254068 254068 209068 206068 249068 226068 TOTAL DISTRIBUTION 1584115 1584115 1464068 1414068 1609068 1486068 Import Trade Matrix Turkey Metric Commodity Cotton Units: tons Time Period Aug/July Aug/March Imports for: MY 2009 MY 2010 U.S. 487236 U.S. 372,001 Others Greece 150805 Greece 85926 Turkmenistan 72266 Turkmenistan 47951 India 61649 India 10052 Uzbekistan 33291 Uzbekistan 12836 Syria 58756 Syria 1988 Brazil 10009 Brazil 27853 Pakistan 9198 Egypt 3522 Azerbaijan 10239 Argentina 4550 Burkina Faso 5563 Burkina Faso 2580 Tajikistan 21006 Tajikistan 19528 Total of Others 432782 216786 Others not listed 36664 67477 Grand Total 956682 521310 Commodity Cotton Units: Bales Time Period Aug/July Aug/March Imports for: MY 2009 MY 2010 U.S. 2236413 U.S. 1707485 Others Greece 692195 Greece 394400 Turkmenistan 331700 Turkmenistan 220095 India 282968 India 46139 Uzbekistan 152805 Uzbekistan 58917 Syria 269690 Syria 9125 Brazil 45941 Brazil 127845 Pakistan 42218 Egypt 16166 Azerbaijan 46997 Argentina 20885 Burkina Faso 25534 Burkina Faso 11842 Tajikistan 96417 Tajikistan 89634 Total of Others 1986465 995048 Others not listed 168282 309719 Grand Total 4391170 2392813 28-May-11
Posted: 14 June 2011, last updated 15 June 2011

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