Drought is impacting cotton production, posing additional risks to Turkiye’s large textile and garment industry which has seen weaker demand since June, according to people from the industry.
The decline in output and drought is impacting Turkiye, which is the world’s fifth-largest producer of textile products, said Ahmet Öksüz, the chair of the Istanbul Textile and Raw Materials Exporters Association (İTHİB).
The price of cotton rose from 16.75 Turkish Liras per kilogram in May last year to 56.6 liras in the same month of 2022, Öksüz said, adding that this is exerting pressure on production costs.He called for removing the 5 percent to 8 percent additional customs duty to provide some respite to companies in the industry.
Cotton imports exceeded 2 million tons while local production is around 800,000 to 900,000 tons, according to Vehbi Canbolat, the chair of TTTSD, another textile association.
“China, India and Uzbekistan have stopped supplying fibers. We turned to the U.S. Greece and Brazil to buy them. Supply problems and price issues will emerge due to drought and as countries keep raw materials for their own consumption.”
Orders in the textile and garment industry have declined by 10 percent in the garment and 20 percent in the textile industry since June.
The cotton output will shrink by 40 percent in the U.S., and production declines are expected in China and India, said Bertan Balçık, the board chair of the National Cotton Council.
“We imported additional 250,000 tons of cotton, which was more than we actually needed in July. With 50,000 tons of domestic production, we should not have any problems on the supply side,” he added.
In order to prevent supply shortages, Turkiye needs to increase the capacity of cotton cultivation areas to 650,000 to 700,000 hectares, and this requires creating a sustainable Turkiye Cotton Standard program, according to Balçık.
The impacts of the expected decline in output on prices are not easy to predict from today, he said.