By: Mr. Pradeep Ahire Jr. Industry Analyst, Textile Excellence
The Turkish clothing industry is the fourth largest supplier in the world, and the second largest supplier to the EU. The Turkish textile and clothing industry has a significant role in world trade, the capability to meet the high standards, and can compete in international markets in terms of high quality, design and a wide range of products. Parallel to the developments in the Turkish textile and clothing industry the Turkish fibers and yarns industry has developed and as a consequence of the increase in demand for textile and clothing products from both domestic and foreign markets, the production, exports and investment in the fibers and yarns industry have increased. Cotton is the essential raw material for the country's textile and clothing industry and Turkey is one of the world's important cotton growers. Turkey ranked seventh in the production of cotton with a total amount of 820,000 tons in the 2006-07 seasons. As one of the results of the Southeastern Anatolia Project (GAP), which is the largest project ever attempted in Turkey, cotton production in Turkey has begun to increase. Irrigation of the Harran Plain began in 1994 and now 471 thousand tons of cotton, which is almost half of Turkey's total cotton production, is cultivated in this region. On the other hand, investment opportunities in GAP, a US$ 32 billion multi-sectoral and integrated regional development project have also been noticed by many foreign investors. Cotton varieties grown in Turkey belong to Gossypium hirsutum.L and until now 54 cotton varieties were registered in Turkey, 34 of which belong to state organizations and 20 of which belong to private sector organizations. Particularly, in the last five years 33 varieties were registered. In Turkey cotton cultivation has been mechanized except first hand hoeing and harvesting. This has production costs were higher and especially harvest problems such as scarcity of worker and picking with trash. In Turkey 99 % of cotton has been harvested by hand. In recent years farmers begin turning to mechanical harvesting. Today in Turkey there are about 100 mechanical harvesters (picker type) and roller-ginning dominate saw-ginning. There are 878 roller-gin and 154 saw-gin plants in Turkey.
Cotton is grown in different regions of Turkey.
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Turkey is a very important cotton country, which is an advantage in raw materials, for the clothing industry. Turkey is a traditional cotton producer and uses this advantage in the textile and apparel sector. Turkey ranks 1st in Europe and 7th in the world cotton production with an average production of 800,000-900,000 tons per year. During 2006-07 season Turkey produced 820,000 tons of cotton. About 30% of the cotton production is high quality long staple cotton and the rest is of medium quality. The cotton industry provides a competitive edge to the textiles industry, which utilizes cotton as its essential raw material. It appears Turkish cotton production could suffer a major downslide in 2008/09 due to a reduction in planted acreage. An early-season delay in precipitation in the southeastern areas resulted in farmers switching to other crops, with local newspapers reporting that up to 25% was planted to other crops. Local forecasts now suggest that this change has happened nationwide, resulting in an acreage reduction of 20-25%, this would push total output down to only 500,000 tons.
In 2007, Turkey was second after India in organic cotton production, but in 2006-07 season, it became the biggest producer in the world with its 40% market share. The important advantage for Turkey of being the leader of the fast growing market was its positive contribution to Turkish textile industry and Turkey's image. According to Farm and Fiber Report, 40% of 57,931 tons of organic cotton produced in the world in 2006-07 season, that is 23,152 tons, were produced by Turkey and noted 32.4%, that is 18,790 tons, were produced by India. More than 80% of Turkey's organic cotton production in 2006-07, which was 63,236 tons according to the figures of the Ministry of Agriculture and Village Affairs, came from Sanliurafa, and about 10% from Aydin. The rapid growth in organic cotton production was the fast growth of demand in organic textile products throughout the world, particularly in the EU countries, in the USA and Japan. 85% of the organic cotton is used in ready wear, 10% in home textiles, and 5% in health and personal care products. Big brands like Nike, Timberland, Mark & Spencer aim at making 5% of the cotton they use in all cotton products organic until 2010-2012. The number of big firms entering the organic cotton market with such targets increases every year. After C&A, NAU, Next and Target in 2006, Pottery Barn, Stella McCartney and Barney's joined the trend in 2007. The U.S. Agriculture Attach has forecast that 2007-08 Turkish cotton consumption will decline to 1.425 million tons or 6.5 million bales, down from 2006-07 cotton use of 1.625 million bales. This reduction is linked to weaker textile and apparel exports and a major increase in cotton yarn and fabric imports. As a result of the weaker consumption, approximately 35 mills have been affected by this situation and have closed or ceased operations altogether.
Due to the availability of huge amounts of raw cotton in Turkey, the cotton textile industry has shown great development as the Turkish cotton yarns industry. Today, Turkey is one of the largest countries in the world in terms of its cotton yarn production capacity. Cotton yarn production in Turkey was about 541,016 tons in 2007.
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As well as the cotton textiles, the Turkish manmade textile sector is also a well developed industry. Today, Turkey is very strong in all areas of synthetic fibers and yarns production and processing. Turkey has the eighth largest capacity for synthetics in the world with 1.2 million tons/year. Turkey was the second largest investor in short staple spindles and open end rotors, which are regarded as the most advanced technology in the world, in the period 1995-2006. In terms of installed capacities of short staple spindles and open end rotors Turkey ranked respectively fifth and second in the world. Turkey's textile industry has seen conditions deteriorate since the second half of 2007, as apparel manufacturers increasingly turned to cheaper imported yarn and fabric in order to improve profit margins. According to the Turkish State Institute of Statistics, declines were broad-based within the sector, as cotton yarns and fabrics fell at an alarming pace. Cotton yarn output fell for the thirteenth straight month in August, down -26.7% from a year ago to 31,055 metric tons, near July's record low. This pulled year-to-date cotton yarn spinning down -23.4% from the first eight months of last year, easily on track to fall at the steepest pace and to the lowest volume in several years.
The Turkish fabric industry which produces almost all kinds of fabrics for apparel, home textiles, upholstery and technical applications has a well developed structure, especially in production based on cotton, wool and manmade raw materials. A large amount of fabric production is based on cotton. The fabric industry based on cotton consists of two segments. One is composed of large scale companies which have production facilities integrated vertically in all stages of fabric production, from fiber processing, spinning and weaving to dying, printing and finishing. Many of them also have ready made goods manufacturing facilities such as clothing or home textiles. The other area is composed mainly of nonintegrated companies on a small scale. These companies cooperate with the Turkish finishing industry which is one of the vital sub-sectors of the Turkish textile industry. Production of cotton fabrics was 654,376 thousand meters in 2007 while in 2006; cotton fabrics production was 645,124 thousand meters. Reflecting the increasingly difficult business conditions facing the local industry, output by Turkish textile mills continues to erode, with August cotton fabric production falling from year-earlier levels and lowest among the eight month of 2008. August volume fell 21.9% from a year ago, reaching the third-lowest level in over eight years. Volume in this latest month fell to 37.4 million meters-a record low-as year-to-date output is off -17.6% from this point last year and on track to fall to the lowest level in over three years. Much of this weakness has been linked to apparel manufacturers substituting domestic output with cheaper imports. Another factor impacting production is the government's lack of incentives to encourage textile production, which has added to the sector's lack of competitiveness.
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Owing to lower cotton demand and weaker downstream Turkish textile and apparel production, imports and exports of raw cotton, cotton yarn, and cotton cloth collapsed in August 2008, pulling cumulative volume this year down for the first time since the 1990s. Total trade fell -23.5% in August from twelve months earlier, the steepest drop in nine years. Both imports and exports fell in August, contributing to the collapse. Shipments arriving at Turkish ports fell for the seventh consecutive month in August, falling -31.3% to US$183.5 million, the lowest volume in twenty months. Lower raw cotton shipments from the U.S. contributed the most to pull the sector lower. Imports from America fell -48.8% to US$48.6 million, the lowest August in six years. The aggregate decline in August imports accelerated the year-to-date erosion, down -12.7% from the first eight months of last year, the steepest rate in nine years. At this pace arrivals of cotton fiber, yarn, and fabric are on pace to cease their six-year expansion and fall to forecast of roughly US$2.4 billion.
Turkey imported US$ 1,640.75 million worth of cotton fiber, yarn and fabric during the January-August 2008. The top supplier was the US with shipments of US$ 426.96 million, or 26%. The second-largest foreign supplier was India with shipments of US$ 199.41 million, accounting for 12%. Pakistan was popular with imports of US$ 193.52 million. The other major suppliers were China, Turkmenistan, Greece, Uzbekistan, Italy and Egypt. In 2007, Turkey's cotton fiber and textile imports were up 36.1% from 2006 to US$ 2.739 billion; with cotton fiber imports the catalyst for this growth. The US was the top supplier with cotton fiber imports jumping 54.1% to US$ 819.42 million, while imports from India surged 289.4% to US$ 375.88 million. Cotton yarn and fabric were the dominant imports from Pakistan and China. Pakistan was the third largest supplier with imports up 35% at US$ 311.99 million, while China came in fourth with imports up 40.3% at US$ 188.84 million. Turkmenistan, Uzbekistan, Italy and Greece were the other major suppliers. Turkey imported 945,679 tons of cotton in 2007, with March, July and August being the largest import months. The U.S. was the top import origin with imports of 616,187 tons, while the other top suppliers were Greece (87,697 tons), India (87,692 tons) and Turkmenistan (53,459 tons).
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Exports are faring only modestly better, with August shipments turning negative for the first time in twenty-eight months. After gradually slowing over most of this year, volume in this latest month fell -5.0% from a year earlier, falling to US$ 106.7 million, the lowest value in two years. Fewer shipments to Algeria (-70.1%) and several key markets in the EU drove August exports lower, mirroring similar trends in downstream apparel exports. Weaker volume in August eased the year-to-date growth, up 16.1% from the first eight months of last year. Even so, shipments in 2008 are still expected to expand for the third straight year, reaching a record level just shy of US$ 1.8 billion. Turkey's cotton textile exports have soared during the first eight months of 2008 compared to same period of 2007. Turkey exported US$ 1,099.47 million worth of cotton fiber, yarn and fabric during the January-August 2008. Italy has remained the top market, with shipments increasing 9.5% to US$ 162.77 million compared to the same period of 2007; however, a major export surge to Poland, Tunisia and Russia have led Turkey's export boom. January-August 2008 exports to Poland climbed 26.8% to US$ 67.69 million, making it the third largest market for cotton fiber and textile exports behind Romania with shipments of US$ 71.84 million. Shipments to Tunisia continued its upward momentum in 2008, after doubling in 2007, with January-August 2008 exports up 62.5% at US$ 50.19 million. Russia is now the sixth largest market, with January -August 2008 shipments increasing 37.5% to US$ 36.63 million. In 2007, Turkey's cotton fiber and textile exports increased 20.9% to US$ 1.535 billion, with the bulk of these shipments being yarn and fabric. Italy, Romania and Germany were the top three export markets, with shipments up 6.1% at US$ 224.42 million to Italy, 17.5% to US$ 114.98 million to Romania and 26.2% at US$ 106.56 million to Germany. Poland, Spain, Tunisia, U.S. and Portugal were the other top markets - exports to Tunisia increased 91.6% to US$ 52.49 million.
Main destinations for cotton yarn exports are Italy, Portugal, Greece and Belgium and for cotton fabric the UK, Italy, USA and Belgium. Whilst Turkey used to be a net exporter of cotton, the trade balance reversed in 1992 and since then Turkey has been a net importer of cotton since domestic demand has persistently exceeded available stocks which heavily declined during the 2008. |
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