Turkey’s exports to Russia slide in October as intense trade efforts fail

Turkey’s exports to Russia slide in October as intense trade efforts fail

KIRKLARELİ – Anadolu Agency
Turkey’s exports to Russia slide in October as intense trade efforts fail

DHA Photo

Turkey’s exporters may have reported their best-ever October, but exports to Russia have dropped one-fifth year-on-year, despite heightened hopes of boosting trade after Russia downgraded ties with the West, figures released by the country’s leading export organization have shown.

The total value of the goods sent to Russia by Turkish exporters slid to $493.9 million in October from $621.9 million in the same month last year, the Turkish Exporters’ Assembly (TİM) announced Nov. 1 during a meeting in the Thracian province of Kırklareli.

The October figures came as a surprise as Turkey was seen as one of the key winners from Russia’s trade war with Western countries.

In early August, Russia banned food imports, worth about $9 billion, from the European Union, the United States, Canada, Australia and Norway in response to trade sanctions over its role in the Ukraine crisis.

Officials in Turkey have predicted a near-doubling in their fruit and vegetable exports to Russia.
Authorities from both countries have also sped up processes to remove barriers obstructing bilateral trade, moving to ease custom regulations, which have been a long-time problem for Turkish merchants in trade with Russia.

The obstacles on selling dairy products to Russia have also been lifted, which paved the way for Turkish exports to begin selling milk and dairy products to the country in mid-October.

However, analysts argue that the economic contraction in Russia that curbed demand in the country and the slowness in overcoming trade barriers between the countries have caused efforts to fall short of expectations.

The surprising decline in the exports to Russia also came when Turkish exporters recorded the highest October goods exports in Turkish history by increasing the value of goods sent abroad by 6.7 percent year-on-year to $12.6 billion.

According to TİM data, the country’s exports rose to $131.1 billion in the first 10 months of the year, a 5.6 percent increase from the same period last year.

Another striking piece of data revealed by TİM was the immense increase in Turkish exports to Egypt, which surged by 78.8 percent to $369.7 million in October, ahead of Egypt’s announcement that it was annulling a trade deal with Turkey.

Egypt said it would annul an agreement with Turkey for Ro-Ro and transit land transportation and declared it would not extend the agreement, which is in effect until April 2015. It also decided not to extend a comprehensive free trade agreement signed with Turkey during the rule of ousted former President Mohamed Morsi, MENA news agency reported Oct. 28.

EU, Fed, Iraq remain risks: TİM head

Germany, the EU’s largest economy, continued to account for the biggest share of Turkish exports with an annual increase of 11 percent over the month, while exports to the EU as a whole surged 8.2 percent.

During the meeting on Nov. 1, TİM Chairman Mehmet Büyükekşi said the organization was following “signals of recession” in the EU region as the 28-nation bloc will have an important role in Turkey achieving its 2015 exporting goals.

“Concerns over a recession in the EU, soaring geopolitical risks and rate fluctuations in emerging economies due to [the U.S.] Fed’s expected decision are the main three reasons for the slow economic growth,” said Büyükekşi.

Büyükekşi also said Turkey’s losses from the drop in exports to Iraq are around $800 million as the Middle Eastern country was the second-largest export destination for Turkey until the recent surge in violence.

Exports to Iraq followed a downward pattern in October as well, falling to $815.6 million with a 23 percent decrease after the country was stunned by an offensive launched by Islamic State of Iraq and the Levant (ISIL) militants in June this year.

The Turkish automotive industry led exports with a 13.6 percent total in October, as it has done for over 12 months. Exported automotive goods have been valued at more than $22 billion since October 2013.