The loss of momentum in textiles and ready-to-wear clothing due to shrinking demand both at home and abroad has also changed the balance in cotton foreign trade.
In fiber, in which we are net importers, 10-month exports reached the highest level of all years with USD 439 million, while imports fell to the lowest level of all years with USD 1.4 billion. Thereby, the foreign trade deficit in cotton fiber item fell to USD 1 billion.
The decline in demand in the textile and ready-to-wear sectors due to falling demand both at home and abroad was also reflected in the foreign trade balance. While imports of cotton yarn and fabric declined, exports decreased. The most important development occurred on the fiber side.
Companies that had difficulty in selling cotton to the domestic market turned to exports. Cotton fiber exports, which were USD 152 million in 2019, increased by nearly 200 percent to USD 439 million in the January-October period of this year. Thus, 10-month cotton fiber exports even surpassed the annual figures of all time. Imports, which exceeded the USD 3 billion mark for the first time last year, fell to USD 1.4 billion. The foreign trade deficit of USD 2.7 billion in cotton fiber decreased to USD 1 billion as of October this year.
Consumption dropped by 600 thousand tons
Half of the current account surplus of the textile and ready-to-wear industries in 2022, which was close to USD 18 billion, was provided by cotton. The earthquake disaster last year and the damage to the Kahramanmaras textile industry, which accounts for 35 percent of cotton consumption, the stagnation in the world, especially in the main market European Union, and the slowdown in domestic consumption inflated the cotton supply. The sector entered the new season with 300 thousand tons of cotton carried over from the previous season and 700 thousand tons of new crops were obtained. Bertan Balcik, President of the National Cotton Council, said, “The consumption of fiber cotton that we use in industry in Turkey decreased from 1.8 million tons to 1.2 million tons. The lack of demand caused the cotton price in Turkey to be traded at 30 percent cheaper prices. This attracted the attention of foreign markets and exports accelerated. This is a positive development for producers, but it is specific to this year. Exports have been a lifeline for producers this year. We think that this balance will return to its old order with the capacity increases in the textile sector.”
Cultivation area decreased by 60 thousand hectares
Balcik stated that the price difference has decreased to 15 percent with the acceleration of exports and said, “Turkish cotton is still the cheapest cotton in the world.” So how will this situation affect cotton cultivation areas? Balçık shared the following information on that subject: “We expect some further contraction in production areas in the following periods. The cultivation area, which was 550 thousand hectares in 2022, decreased to 430 thousand hectares in 2023. We expect this to decline to 370 thousand hectares this year.” On the other hand, fiber cotton imports continue in the sector, albeit at a slower pace. Stating that this is due to the import connections made before, Balcik said, “These are already coming to our country. As far as we could follow, the connections continued until July-August. There were not many imports in September. The ones that were made are sustainable, specially certified branded cottons. That already continues somehow. That is our own shortcoming. As a country, we need to switch to BCI, non-GMO or organic cotton.”
10-MONTH DECLINE IN FIBER IMPORTS EXCEEDS 40 PERCENT
Cotton products such as fiber, yarn and textiles are grouped under 52 chapters in foreign trade. It is noteworthy that while exports of almost all of the main groups in the said chapter decreased, only cotton fiber exports increased. For example, cotton yarn exports decreased by 36 percent to USD 363 million in the January-October period of this year compared to the same period of the previous year, while cotton textile exports decreased by 14 percent to USD 709 million. The only increase was seen in cotton fiber. Looking at 52 chapters in general, as of October, exports decreased by 10 percent to USD 1 billion 715 million compared to the same period of the previous year, while imports decreased by 42 percent to USD 4 billion 260 million.