Following the war between Russia and Ukraine, ready-to-wear exporters turned to neighboring countries after the logistical problems caused by the US and EU embargo against Russia and the war, and broke a record.
In the January-August period of this year, exports to Russia and Ukraine fell by 38 percent and 39 percent, respectively, while exports to Poland and Uzbekistan increased rapidly. It was noted that the payment problems in Russia were overcome with local partners through Uzbekistan, while Poland was used for Ukraine. In parallel with the developments, clothing exports to Uzbekistan increased by 248 percent and exports to Poland by 40 percent in the 8-month period of this year.
On the other hand, these two countries ranked second and third after Palestine in terms of export growth. The sector’s exports to Palestine increased by 20 thousand percent!
Sector representatives stated that due to the embargo imposed on Russia, exporters have turned to different countries by using their ‘flexible’ muscles and created a path to export to Russia with the help of local partners, while logistical problems to Ukraine were overcome through Poland.
On February 24, 2022, after Russia declared war on Ukraine and invaded the country, the United States and the European Union countries decided to impose sanctions on Russia on hundreds of products in a wide range of areas including trade, finance, energy, industry, technology and transportation. With the blockage of payment channels in the following period, there was a significant decline in ready-to-wear exports.
In the whole of 2022, when the war started, the ready-to-wear sector’s exports to Russia increased by 14.2 percent to USD 328 million and 81.5 percent to USD 596 million in 2023. But in the 8-month period of this year, as payment problems increased, the exports decreased by 38.6 percent to USD 250 million. The ready-to-wear sector became the 3rd sector whose exports to Russia declined the most with this rate.
In the same period, exports to Uzbekistan started to increase. It reached USD 30 million with an increase of 65 percent in 2022, USD 30 million with an increase of 35 percent in 2023, USD 41 million with an increase of 35 percent in 2023 and USD 93.3 million with an increase of 248.3 percent in the 8-month period of this year. The sector that increased its exports this year to Uzbekistan the most was apparel. However, in the same period, ready-to-wear sector exports in total decreased by 8.9 percent.
Polish solution to the logistics problem
In the same period, exports to Ukraine suffered due to the ongoing state of war and the blockages in air, land and sea routes. Although there were some solutions to the problems in the following period, the blockage continued in the export channels of these sectors to Ukraine, which is among the target markets of sectors such as leather and ready-to-wear.
While clothing exports to Ukraine increased by 155 percent to USD 441 million in 2022, it decreased by 53.9 percent to USD 203 million in 2023 and by 39.7 percent to USD 85 million in the 8-month period of this year.
In the same period, clothing exports to Poland, Ukraine’s border neighbor, decreased by 0.9 percent to USD 400 million in 2022, while increasing by 47.8 percent to USD 592 million in 2023 and by 40.8 percent to USD 441 million in the 8-month period of this year.
“Being agile and flexible is a necessity of trade”
Stating that the data clearly points to a traffic deviation, Ramazan Kaya, President of the Turkish Clothing Manufacturers Association, said: “When an embargo is imposed on a market or trade barriers are imposed, alternative markets are found. In the past, products were sent to these markets. Now these markets are used as logistics channels for these countries. Textile centers such as Osmanbey and Laleli send more goods to these markets. This is also an indicator of flexibility. Being agile and flexible is also a necessity of trade.”
TOBB Ready-to-Wear and Apparel Sector Assembly President Şeref Fayat stated that the reason for the rapid increase in sector exports to Uzbekistan and Poland is the embargo imposed on Russia and the use of these countries due to logistical problems in Ukraine and that the barriers in trade have been eliminated to some extent with local partners in these countries.
Ready-to-wear exports to Palestine skyrocketed
One of the most important recent examples of traffic diversion is the trade with Palestine, which is under Israeli attack. Due to the Gaza war, Israel first imposed restrictions on some products and then stopped trade in May.
According to TIM data, Turkey’s total exports to Palestine increased by 423 percent in the January-August period of 2024. Exports to Palestine, which were USD 77 million dollars in the first 8 months of 2023, skyrocketed to USD 404 million dollars in the same period of this year. In some sectors, this increase was much more striking. While USD 238,000 worth of apparel products were sold to the country in the 8-month period of last year, this amount increased by 20,000 percent to USD 48 million in the same period of this year. While indirect sales to Israel are claimed to be effective in the increase, some business people also stated that trade with Israel continues through Greece.
