“Commercial Dispute between US and China Affects Turkish Cottons”
Bertan Balçık, Chairman of the National Cotton Council, said that the cotton prices have been declining after the support package announced by the US to protect their producers due to the ongoing commercial disputes with China, which in turn caused damage to Turkish cottons.
Bertan Balçık said the trade war between the United States and China has reduced the demand for cotton around the world. Noting that the USA has decided to provide 16 billion dollars of incentives for the producers of agricultural products, especially the cotton producers, Balçık said “The decline cotton prices in the world after the support package announced by the US to protect the domestic producers due to ongoing trade disputes with China is damaging the Turkish cottons.”
Balçık also noted that thanks to positive weather conditions in the world, an increase is expected in cotton production, which may create an excess supply in the market.
Emphasizing that prices for polyester, the biggest competitor to cotton yarns, are declining very quickly in China, Balçık said that they are expecting a significant reduction in cotton planting areas if measures are taken next year, and that will affect the textile industry, which has the biggest current surplus.
Balçık stated that for the last 2 years they have been expecting the premium price per kilogram for cotton to be TRY 1.2 instead of TRY 0.80 in order for the producers and industry not to be affected by the price decline and said, “In addition, these premiums should be paid as soon as possible after the harvesting. The diesel and fertilizer support is currently TRY 44, which needs to be TRY 70. The rotation condition for support should also be postponed for the time being, considering the current situation.”
“Textile procuders should prefer domestic cottons”
Barış Kocagöz, Chairman of Izmir Commodity Exchange Assembly, argued that the decline in cotton prices due to the trade war between China and the United States affected the Turkish farmers. “The cotton costs us TRY 12.5. And the prices are between TRY 9 and 9.5. That is not possible to sustain.” Kocagöz added, “We concerned that the producers who will be in loss in harvesting will turn away from cotton production.
Kocagöz pointed out that in such an environment, the textile industry should prefer domestic cottons and said that “The textile manufacturers should first consider their country in their business. They can do this by preferring Turkish cottons. But their focus is on how they can get it with lower prices.” This is not fair at all.”
Kocagöz said that the support to be provided for cottons next year should also be announced and added, “We need to announce our support policy within the scope of the 5-year plans. At the moment, the Turkish cotton price fell from TRY 12 to TRY 9.5. This, of course, is good for the US. They want to be the sole producers in the world. We need to change that.”
Price Intervention for Cottons
Bülent Uçak, Izmir Commodity Exchange Board Member, said that price intervention for cotton by the Turkish Grain Board is an option. Noting that the prices have declined by 20% in the world in the last month, Uçak said that “We cannot predict what will happen in the coming period. It is expected that the prices to be between TRY 8-8.5 in the East and the Southeast and TRY 8.5-9 in the Aegean region. And in such this case, even the producers, who have their own land and do not pay for rent, cannot make a profit.”