cotton market in turkey. content i. introduction ii. general view of the market cotton production in...

COTTON MARKET IN TURKEYCOTTON MARKET IN TURKEY

CONTENTCONTENT

I. IntroductionI. Introduction

II. General View Of II. General View Of The The MarketMarket

• Cotton Production in Turkey Cotton Production in Turkey

• Cotton Consumption in Turkey Cotton Consumption in Turkey

• Cotton Import and Export in Turkey Cotton Import and Export in Turkey

III. PoliciesIII. Policies

• General Description Of Current Policies General Description Of Current Policies

• Organization of Cotton MarketOrganization of Cotton Market

IV. Policy Implications and ConclusionIV. Policy Implications and Conclusion

INTRODUCTIONINTRODUCTION

Turkey is one of the eight biggest countries which Turkey is one of the eight biggest countries which produce the 80% of cotton in the world. From the produce the 80% of cotton in the world. From the Turkey’s side, cotton as a raw material is really important Turkey’s side, cotton as a raw material is really important for our main industries especially for the textile and for our main industries especially for the textile and ready-to-wear clothing sectors.ready-to-wear clothing sectors.

Textile is the most important related industryTextile is the most important related industry with with cotton. cotton. Both cotton and textile are the most subjected to Both cotton and textile are the most subjected to different government interventions in the world.different government interventions in the world.

COTTON PRODUCTION IN TURKEYCOTTON PRODUCTION IN TURKEY

INTERNATIONAL POSITIONINTERNATIONAL POSITION

Source: Anonymous, 1999-2003a.


COTTON PLANTATION AND PRODUCTIONCOTTON PLANTATION AND PRODUCTION

Source: Anonymous 2001 and Anonymous 2003a


COTTON PLANTATIONS ACCORDING TO REGIONSCOTTON PLANTATIONS ACCORDING TO REGIONS

Source: Anonymous, 2003a and Özüdoğru, 2002.

COTTON PRODUCTION ACCORDING TO REGIONSCOTTON PRODUCTION ACCORDING TO REGIONS


Source: Anonymous, 2003a and Özüdoğru, 2002.

THE MAIN FACTORS FOR COTTON CONSUMPTIONTHE MAIN FACTORS FOR COTTON CONSUMPTION

Improving textile and confection sectorImproving textile and confection sector

Rapidly increasing world populationRapidly increasing world population

Increasing GDP per capita levelsIncreasing GDP per capita levels

Price of Synthetic Fiber and its consumptionPrice of Synthetic Fiber and its consumption

COTTON CONSUMPTION IN TURKEYCOTTON CONSUMPTION IN TURKEY

Although Turkey is one of the biggest cotton Although Turkey is one of the biggest cotton producer in the world, it covers its consumption producer in the world, it covers its consumption needs by import. The main reason of that is needs by import. The main reason of that is rapidly improving textile sector and opportunity rapidly improving textile sector and opportunity to buy cheaper cotton from foreign countries to buy cheaper cotton from foreign countries than the domestic and credit possibilities than the domestic and credit possibilities especially from U.S.especially from U.S.



Source: TUIK

COTTON IMPORT AND EXPORTCOTTON IMPORT AND EXPORT

TURKEY’S COTTON IMPORT ACCORDING TO TURKEY’S COTTON IMPORT ACCORDING TO COUNTRIES (000/tons)COUNTRIES (000/tons)

TURKEY’S COTTON EXPORT ACCORDING TO TURKEY’S COTTON EXPORT ACCORDING TO COUNTRIES (000/tons)COUNTRIES (000/tons)

COTTON IMPORT AND EXPORTCOTTON IMPORT AND EXPORT

III. III. PPOLICIESOLICIES

In our country,In our country, AegeanAegeanÇukurovaÇukurovaAntalyaAntalyaSoutheast Anatolian Southeast Anatolian

are the main regions for the are the main regions for the cotton production.cotton production.

In the European Union, In the European Union, especially Spain and Greece especially Spain and Greece produce approximately 350 produce approximately 350 thousands ton cotton. And in thousands ton cotton. And in these countries the high support these countries the high support rates make the production costs rates make the production costs lower according to Turkey. But, lower according to Turkey. But, the limited cotton production in the limited cotton production in the EU and limited amount of the EU and limited amount of cotton that comes from the EU cotton that comes from the EU to Turkey does not affect the to Turkey does not affect the cotton producers negatively in cotton producers negatively in our country.our country.

In the production of cotton one of the most important factors is In the production of cotton one of the most important factors is

labor power and in our country approximately 6 million labor power and in our country approximately 6 million

people are working on the cottons’ plantations for their own people are working on the cottons’ plantations for their own

living.living.

In the world, the cotton is cultivated in many countries and In the world, the cotton is cultivated in many countries and

because of this reason international institutions have many because of this reason international institutions have many

studies and rules for this product. studies and rules for this product.

But, although in 29 OECD countries there have been studies But, although in 29 OECD countries there have been studies

for 13 products, the cotton has not been one of them. for 13 products, the cotton has not been one of them.

Consequently, in OECD countries the calculations for supports Consequently, in OECD countries the calculations for supports

to cotton producers or taxation of consumers related to cotton to cotton producers or taxation of consumers related to cotton

have not been done.have not been done.

Current PoliciesCurrent Policies When we look at the domestic support mechanism in When we look at the domestic support mechanism in

favor of the cotton production in Turkey, there are favor of the cotton production in Turkey, there are three different support schemes:three different support schemes:

1. Support Premium1. Support Premium

2. Direct Income Support2. Direct Income Support

3. Diesel and Chemical Fertilizer Support3. Diesel and Chemical Fertilizer Support There are no guaranteed;There are no guaranteed;

-minimum prices,-minimum prices,

-national production quantities-national production quantities

for the cotton producers.for the cotton producers.

1. Support Premium1. Support Premium;; Income support payment per kg has Income support payment per kg has been provided to the cotton producer under the name of been provided to the cotton producer under the name of Support Premium. Domestic and foreign market prices, Support Premium. Domestic and foreign market prices, costs of the producers and budgetary means have been taken costs of the producers and budgetary means have been taken into consideration in determination of the amount of the into consideration in determination of the amount of the support. support.

2. Direct Income Support;2. Direct Income Support; Within the scope of the Direct Within the scope of the Direct Income Support system, income support payment has been Income Support system, income support payment has been provided to the cotton producers as well as other products provided to the cotton producers as well as other products up to 50 hectares in accordance with the By-law on National up to 50 hectares in accordance with the By-law on National Farmer Registration SystemFarmer Registration System..

3. Diesel and Fertilizer Support; 3. Diesel and Fertilizer Support; Diesel and Fertilizer Diesel and Fertilizer SupportSupport have been provided to the cotton producershave been provided to the cotton producers

In case of the In case of the determination of an unfair determination of an unfair support payment, payments support payment, payments made are recovered with its made are recovered with its interest from the farmers interest from the farmers who have benefited from who have benefited from the payment. Natural and the payment. Natural and legal person who forge the legal person who forge the documents or certificates, documents or certificates, which lead to unfair which lead to unfair payment, are also payment, are also successively bound for the successively bound for the amounts, which will be amounts, which will be recovered.recovered.

Organization of the MarketOrganization of the Market Cotton is purchased by the Cotton is purchased by the

cooperatives and ASCUs, ginning cooperatives and ASCUs, ginning plants and traders. Almost all of plants and traders. Almost all of the cotton producers have been the cotton producers have been organized within the framework of organized within the framework of the 89 agriculture sales the 89 agriculture sales cooperatives and 4 Unions. These cooperatives and 4 Unions. These institutions have important roles in institutions have important roles in the domestic trade of cotton. the domestic trade of cotton. Agriculture Sales Cooperatives and Agriculture Sales Cooperatives and ASCUs (namely Tariş Pamuk ASCUs (namely Tariş Pamuk Birliği, Çukobirlik, Antbirlik and Birliği, Çukobirlik, Antbirlik and GAP Birlik) purchase GAP Birlik) purchase approximately 20% of the total approximately 20% of the total cotton production in Turkey.cotton production in Turkey.

IV.POLICY IMPLICATIONS AND IV.POLICY IMPLICATIONS AND CONCLUSIONCONCLUSION

When we consider the cotton data in Turkey, while When we consider the cotton data in Turkey, while cotton production has shown a trend of reasonable cotton production has shown a trend of reasonable increase, cotton consumption also has displayed increase, cotton consumption also has displayed increasing behavior. increasing behavior.

With the significant investments in textile and With the significant investments in textile and confection sectors, the cotton production witnessed confection sectors, the cotton production witnessed an accelerated increase from 1950 to 1973. an accelerated increase from 1950 to 1973.

When we look at the 1989-1991 periods, there was When we look at the 1989-1991 periods, there was not anynot any price support mechanism, neither price support mechanism, neither on on trade trade restrictions restrictions nornor exports and imports of cotton exports and imports of cotton. .

In the beginning of 1990s, the Turkish government In the beginning of 1990s, the Turkish government returned to the support price mechanism with the returned to the support price mechanism with the decrease of world cotton prices. But, this mechanism decrease of world cotton prices. But, this mechanism did not provide sufficient increase in cotton did not provide sufficient increase in cotton production because of several reasons. production because of several reasons. Firstly, the level of support prices set was not adequate in Firstly, the level of support prices set was not adequate in

comparison to the supports given in some other countries. comparison to the supports given in some other countries. Secondly, the support price system was implemented Secondly, the support price system was implemented

through the agricultural sales cooperatives unions through the agricultural sales cooperatives unions (ASCUs), which procured roughly 1/6 to1/3 of the total (ASCUs), which procured roughly 1/6 to1/3 of the total crop, the remaining quantity being left to private sector crop, the remaining quantity being left to private sector procurements.procurements.

As a result, according to Turkey’s conditions, As a result, according to Turkey’s conditions, the cotton prices in the world is still lower the cotton prices in the world is still lower and the cost of production as some countries and the cost of production as some countries continue to subsidize their cotton industries is continue to subsidize their cotton industries is well below. At this situation, as many other well below. At this situation, as many other cotton producing countries, Turkey’s cotton cotton producing countries, Turkey’s cotton production sector meets with difficulties and production sector meets with difficulties and remains under increased pressure. remains under increased pressure.

THANKS FOR YOUR ATTENTIONTHANKS FOR YOUR ATTENTION

Burcu-AhmetBurcu-Ahmet

cotton market in turkey. content i. introduction ii. general view of the market cotton production in...

Documents