Page 63 - TURKRptAUG19

recession and previous tax cuts granted to a number of sectors. “Anecdotal evidence suggests that consumers are cutting back on their spending and latest statistics confirm such observations,” Oncel added. Oncel referred to data from the country’s statistics authority showing that the retail sales volume index dropped 4% y/y in May. “In the month, turnover in the retail sector rose some 16% y/y. However, this increase stemmed entirely from the fact that retailers had to raise their prices to meet rising costs. Retailers’ turnover in fact declined in real terms in the first half of this year,” Oncel added. Sales to foreign tourists help retailers mitigate the adverse effects of poor local demand. “Retailers focus more on foreign tourists during the summer season. Sales to foreign tourists increased significantly in popular holiday destinations, such as Antalya, Bodrum and Marmaris”, Oncel also said. “Data show that transactions with foreign credit cards soared 100% on an annual basis to TRY31.6bn in the first half of the year. We expect foreign tourists to make a larger contribution to retailers’ sales in July and August,” he added. Oncel was confident that the second half of 2019 will be much better for retailers compared to the first. He also noted that 381 member companies had some 4,000 stores abroad at the start of 2019. “But this figure will increase to 4,500 at the end of this year. As far as the local network is concerned, those member retailers operate a total of 70,000 stores and 65% of them are located in shopping centres” Oncel said.
9.1.6 Agriculture sector news
Turkish producers face bankruptcy as Iraq bans egg imports from Turkey. Local producers in the southern province of Gaziantep near the Iraqi border are struggling to survive as the central government in Baghdad has banned egg imports from Turkey since May, Voice of America-Turkish reported. Before the ban Turkish producers used to ship some 80% of surplus eggs that could not be consumed locally to Iraq. Now, those producers are forced to sell all the eggs in local market but at a loss. The price of a 30-egg pack, which cost TRY12 [$2.1] to produce, has dropped to as low as TRY5. Iraqi producers can meet only 20% of local demand and thus the country has to import large amounts of eggs, according to Kenan Uygur, the head of Gaziantep Egg Producers’ Association. “The price of a 30-egg pack has jumped to $40 from $25 in Iraq. Baghdad’s decision to ban purchases from Turkey does not make any economic sense. Apparently, it was a politically motivated action triggered by tensions between Ankara and the Baghdad government,” he said.
The export revenues of Turkish flour producers hit $22bn across the past decade, according to the Turkish Flour Industrialists Federation (TFIF). Turkey’s flour exports, which stood at about 170,000 tonnes in 2001, rose by 20 times to reach 3.3mn tonnes last year, said Eren Gunhan Ulusoy, the head of the federation. “Turkey exported $1bn worth of flour while it imported $1.1bn worth of wheat. Our exports were $2.4bn as a whole flour product group and our gross added value was about $1.4bn last year,” he added. He noted that Turkey globally ranks eighth in wheat production with 19-20 million tonnes annually. However, he said production could not meet demand in flour product exports due to local consumption. "While there were 9.3 million hectares of wheat cultivation area in 2001, this area fell below 7mn hectares in 2019," Ulusoy said. Turkey has 535 active flour factories in its 81 provinces, according to Ulusoy. Food inflation is driving the country’s annual inflation rate, which is hovering around 16%. In June, goods prices declined by 1.65% m/m due to seasonal factors. However, annual food inflation stood at 19.2% in June, well above the headline consumer inflation price inflation rate of 15.7%. Processed food prices rose by 2.44% m/m in June for an annual increase of 23.41%. Bread and cereal prices increased 1.94% in June from the previous month while the annual increase was 25%. The country’s agriculture sector expanded at 2.5% y/y in the first quarter of 2019 versus the 0.5% y/y contraction seen in the previous quarter, according to the latest GDP data.
Turkey’s 24 pasta manufacturers have expanded their geographical outreach. “We are now shipping pasta products to six more nations, which are
63 TURKEY Country Report August 2019 www.intellinews.com