Turkey continues to be one of the leading markets for U.S. cotton. Turkey’s textile industry remains important to the economy in terms of investment, employment and exports. U.S. cotton has a very good reputation in Turkey, and strong U.S. exports in recent years reflect this. Lack of good quality local cotton due to rains and floods during the last harvesting season will support a strong demand for U.S. cotton this year as well. Turkey is expected to remain a significant importer in coming years due to quality of U.S. cotton, increasing domestic consumption and availability of GSM-102 export credit programs.
The industry has been investing in modern crushing facilities and is continuing to expand capacity despite the seasonal down turns in the local poultry industry. The outbreak of Avian Influenza in late 2005 and early 2006 hurt the local poultry industry. However, the industry recovered from the adverse effects of the outbreak and soybean consumption increased in 2007. Increased production of bio-diesel also contributed to the demand for soybeans for crushing. Marketing programs of the American Soybean Association help drive demand for soybeans in Turkey and the U.S. continues to be a leading supplier for the Turkish market. On March 13, 2006 the Turkish government increased soybean import duties to 10 percent from 0 percent.
Soybean meal consumption continues to increase in response to demand from Turkey’s poultry industry. Local production has increased in recent years, as crushing capacity has grown. Full fat soy has become very popular among local poultry producers and a number of companies have installed or are in the process of installing new crushing facilities. On March 13, 2006 the Turkish government increased soybean meal import duties to 13.5 percent from 8 percent.
Turkey continues to import large quantities of crude vegetable oils (sunflower oil, corn oil, and soy oil) since the demand for vegetable oils continues to outpace production. Turkish refined oil export markets include the Middle East, Russia, the NIS and North Africa. The United States is the largest corn oil supplier for Turkey.
Domestic corn production has increased in recent years and Turkey had a record high crop in 2005. As a result, Turkey reduced imports and exported corn, which is not seed, for the first time. However, high production reduced the market prices, which discouraged farmers to grow corn. As a result, planting area and production were reduced in 2006. Currently, corn prices are about twice of what they were a year ago. This may encourage producers to produce corn again in 2008. Turkey imported larger quantities of corn during the first half of 2007 than it did during the same period in 2006. The import duty, which was 130 percent in 2006, was reduced seasonally due to the shortage and high prices.
The United States is the largest tallow supplier to Turkey, which uses tallow only for making soap. Turkey supplies processed soaps to most of the world, the primary markets being the Middle Eastern, North African, Former Soviet Union, and Eastern European countries.
Demand for soybean oil in 2005 was driven by the surge in bio-diesel production in Turkey. Total imports declined in 2006 due to the government’s new regulations on the specifications of bio-diesel, which favor canola oil and reduces the cost advantages of production. Most soybean oil imports are from Argentina. In 2007 soybean oil imports declined significantly due to high world soybean oil prices. The government of Turkey decreased import duties of most oils, including soybean oil from 31.2 percent to 22 percent to prevent inflationary effects on local food prices. However, according to the 2008 official import regime, import fees will return to 31.2 percent on May 31, 2008.
Turkey normally produces about one half of its needs and imports the other half. However, Turkish rice production has increased significantly in recent years due to preventive majors taken by the Turkish government and, as a result, Turkey had a record high crop in 2006, which has decreased the need for imports. Turkey eliminated most of the preventive measures and started providing control certificates again as a result of the court case raised by the United States at the WTO. This is expected to discourage producers and, as result, domestic production is expected to be lower in the future. In recent years, Turkey has been importing larger quantities of Egyptian milled rice, which is currently much cheaper than the U.S. rice. This is especially important since Turkish markets are price sensitive. Most of the rice in 2007 has been imported from Egypt and the remainder from Italy. This is milled rice. Turkey typically imports paddy rice from the United States but due to high prices of U.S. paddy and more affordable shipping costs and price of milled rice from Egypt coupled with lower duty rates, Egyptian milled rice was preferred.