Modernization in Turkish cotton industry expected to rise demand

Turkey’s cotton industry have started investing in new technology as the result its domestic cotton consumption is expected to rise to 6.89m 480 pound bales, a ten year high next year and up 115,000 bales from the previous session, the USDA’s official said.

According to the US Department of Agriculture’s bureau in Ankara, Turkish textile exports has raised due to increased sales in Europe, as well as thawing relations with Russia.

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.

Turkish domestic production was forecast to surge by 21% year on year in 2016-17, to 3.21m bales. This will be the biggest crop since 2006-07. This will even be 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.

The heavy production will reduce 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. 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.

However, the industry feels some of the US cotton will come under the inward processing regime for exports and so will not be subject to the antidumping duty. Hence, the US will remain top seller to Turkey.