Turkey’s agricultural sector shrank in 2016 amid plunge in exports, prices: Association

ANKARA

The agricultural sector has contracted by 6 percent last year due to plunging exports and the consequent decline in prices in the domestic market, the head of a leading sector association announced on Jan. 5. 

The head of the Turkish Union of Agricultural Chambers (TZOB), Şemsi Bayraktar, said the agricultural sector contracted by 6.2 percent in real terms in the first nine months of 2016, although it grew 9.1 percent in 2015. 

“The share of the agricultural sector in gross domestic product (GDP) remained at 7.5 percent by the end of September 2016 as was the case throughout 2015,” he said at a press meeting in Ankara on Jan. 5. 

“The main point here is why the sector shrank. The main reason behind the contraction was a dramatic plunge in exports and the declining trends in product prices in the domestic market due to an obvious disequilibrium in supply and demand,” he added. 

Bayraktar said there was no decrease in agricultural output, adding that Turkey’s plant and livestock production increased in the first nine months of 2016 with the exception of grain production. 

While the producer prices of 18 out of 34 main products decreased, the market prices of 24 products out of 38 increased. Both producers and consumers lost last year. 

“Only middlemen made money out of this system,” said Bayraktar, adding that the association had closely followed the world of the Food and Agricultural Product Markets Monitoring and Assessment Committee. 

Meanwhile, the committee has decided that studies on the establishment of the Early Warning System would be conducted under the coordination of the Central Bank and Food, Agriculture and Livestock Ministry, its technical infrastructure would be completed as soon as possible. 

The committee met on Dec. 30 under the presidency of Deputy Prime Minister Mehmet Şimşek.


Exports to Russia

Bayraktar said that the agricultural sector was also hit by the sharp plunge in exports last year as well, although it posted an average of $5.5 billion trade surplus in the previous years. 

“Turkey’s fresh vegetable and fruit exports to Russia plunged to $247 million in the first 11 months of 2016 with a 66.5 percent of decrease compared to the same period of 2015. Our loss here thus exceeded $490.8 million. Although we have been very happy to see that Russia lifted the embargo on tangerine, orange, apricot, peach and plum, the restrictions have still been the case on many products, including apple, tomato and poultry meat,” he said, adding that “the sector wants to see the restrictions to be lifted on all products,” he said. 

Turkey’s poultry exports to Iraq, which was once its largest market, also saw a sharp decline last year. 

While Turkey’s agricultural exports regressed to $14.6 billion in the first 11 months of 2016 with a 3.6 percent of year-on-year decline, its imports decreased to around $10 billion. 

“Despite problems, our sector continued to make a positive contribution to the economy by posting a $4.6 billion trade surplus in the first 11 months of the year,” Bayraktar said.