Turkey’s exports to Russia, which had gained momentum after the war, entered a downward trend after China’s attack on this market. Land and maritime transports also confirm the change.
China, which has strengthened its international logistics infrastructure, has increased its exports to Russia by double digits in the last two months as it has also gotten ahead in price competition. Turkey, on the other hand, has been experiencing a contraction in its exports to Russia for the last three months, following record increases until recently.
China’s aggressive return to global markets also hit Turkey’s exports to Russia, which had gained momentum after the war. Turkey’s exports to Russia, which contracted 11 percent year-on-year in August, fell 25 percent in September. China captured Turkey’s increasing export share to this market.
China’s strengthening of its international logistics infrastructure had a significant impact on China’s increased exports in this market.
With the outbreak of the war in Ukraine, the West imposed various sanctions against Russia and European companies’ trade with the country came to a standstill. This led to record increases in Turkey’s foreign trade with Russia and Ukraine. Russian exports were a lifeline for the industry. On the other hand, transit shipments to Russia by sea through Turkey had also accelerated. But with the withdrawal of EU companies, Chine moved to take advantages and this changed things.
According to TurkStat data, Turkey’s exports to Russia have increased by three-digit percentages every month since the beginning of the year compared to the same month of the previous year, but the rate of increase first dropped to double digits in April and then started to decline. Turkey’s exports to Russia contracted by 11 percent in August and 25 percent in September. TurkStat data for October have not yet been released. However, according to provisional data released by Türkiye Exporters Assemble (TIM), exports to Russia fell by 19.8 percent year-on-year in October.
Chinese shipments to Russia rose 17 percent to USD 8.69 billion in October from a year earlier, Reuters calculations based on customs data showed. The exports to Russia grew 21 percent year-on-year in September. China’s overall exports on the otherhand declined 6,4 percent to USD 274.8 billion last month.
“China came back stronger than before”
Speaking to ECONOMİ daily, TIM Board Member Basaran Bayrak stated that China made an aggressive return to global trade after the pandemic and said, “China came back stronger than before. They tested the world and saw that they were still in control.” Stating that the cost of industrialists in Turkey is increasing day by day, Bayrak said, “While there is an increase in many cost items such as energy and labor, the exchange rate does not increase at the same rate. Therefore, Turkish lira remains expensive. We cannot fix the price. On the other hand, our industrialists are also experiencing difficulties in accessing financing. The Chinese government, on the other hand, supports both industrial companies and logistics companies with various incentives. Therefore, we cannot compete with China.” Bayrak said that China has made significant improvements in e-commerce, which gained momentum with the pandemic, and that it is growing rapidly in this field globally.
Logistics investments fastened China’s exports as well
Basaran Bayrak explained that China, which has the largest ports in the world, has also made improvements in logistics. Bayrak said, “Transportation from China to Europe and Russia is faster and cheaper than before. China has reduced logistics costs by developing alternative routes. There are no dramatic transportation times like in the pandemic. In the past, we could hardly get steel from China in three months, but now we receive it in one month.” Basaran Bayrak explained that China, which has the largest ports in the world, has also made improvements in logistics. Bayrak said, “Transportation from China to Europe and Russia is faster and cheaper than before. China has reduced logistics costs by developing alternative routes. There are no dramatic transportation times like in the pandemic. In the past, we could hardly get steel from China in three months, but now we receive it in one month.”
Cihan Ozkal, Board Member of the International Transportation and Logistics Service Producers Association (UTİKAD), said that China is making investments to strengthen its logistics infrastructure with Russia, both on rail and maritime routes. Mahmut Isik, General Manager of Medkon, a local maritime company that transports to Russia, said that China has made a breakthrough in export transportation to Russia. Chinese shipping companies, which used to transport to Russia via Turkey at the beginning of the war, started to open direct lines to Russia. Some of them reach St. Petersburg, one of Russia’s important port cities, via the Baltic, while others reach Novorossiysk Port via the Black Sea. Mahmut Isik said that some Turkish forwarder companies have also started to charter ships and start direct transportation from China to Russia. The Chinese partners of Tekirdağ Kumport Port, who visited Turkey recently, also stated that some shipowners who used to transit to Russia via Turkey are now unloading their cargo directly to St. Petersburg instead of transiting through Kumport. On the other hand, China has also strengthened its railroad network with Russia. A significant portion of export cargoes from China to Russia are also transported by rail.
Turkish truck shipments to Russia down 15% in 10 months
The decline in Russian exports in October was also reflected in Turkey’s international transportation statistics. More than half of Turkey’s exports to Russia are transported by road. According to the data obtained from the International Transporters Association (UND), with the effect of the decline in the last two months, export transports from Turkey to Russia by road, including Ro-Ro transports, decreased by 15 percent in the January-October period and amounted to 25 thousand 955 trips.