2015 Cotton Market: Part 3, Turkey

In our final short series on the current cotton market we will discuss Turkey. As mentioned in the previous two blogs both China and India have support programs for their domestic production that hurts US cotton farmers. The Turkish situation is a lot different. Turkey only produces a small amount of cotton and must import about half of the cotton their mill industry needs. Behind China, Turkey is the largest customer for US grown cotton. Below is a chart showing US exports of raw cotton in thousands of 480lb bales from the last 6 years.

UScottonExports5yrchart

As you can see Turkey is the second largest buyer of US cotton behind China. The recent anti-dumping investigation by the Turkish government has caused major concerns about the future of US exports to Turkey. There doesn’t seem to be much factual evidence or price data to suggest that US cotton exporters are dumping cotton (selling below world price or undercutting others to hurt the domestic suppliers) into Turkey. Without any data suggesting why an anti-dumping investigation has occurred, the US cotton industry’s best guess is that this is a politically motivated case. Just prior to the anti-dumping investigation, the US issued its own investigation into steel pipe imports from Turkey, so it seems the cotton case is retaliation for the steel pipe case. Whatever the reason, the situation isn’t good for the US cotton farmer or the Turkish textile industry who has complained to the government that they didn’t ask for an investigation.

Going back to the importance of the Turkish market to the US cotton farmer, the below two graphs show how important Turkey has become this last year.

UScottonExports2013 UScottonExports2014

In 2013 Turkey accounted for 14% of total US cotton exports with China accounting for 39%. The reversal of China’s cotton policy and thus the lowering of imports by China in 2014 shows their share of US cotton exports in 2014 at 25% while Turkey’s rose to 19%. I think the numbers speak for themselves in showing how important the Turkish market is to the US cotton farmer. Hopefully this investigation will be resolved without in long-term affects on the US cotton export market.

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