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China, Others Race to Replace Turkish Textile Sales to Russia

By   /   December 22, 2015  /   No Comments

China / Russia – Today’s Zaman reports that while there have been several obstacles facing Turkey’s textile exports to Russia amid an ever-escalating standoff between the two countries, Chinese and Indian companies have mobilized all means to replace their Turkish counterparts, a prominent sector representative warns.Even Italians have, in recent times, taken some steps to boost its presence in the Russian market despite their own dispute with Moscow that has developed since the latter’s Crimea annexation last year, Hikmet Eraslan, CEO of Dosso Dossi Holding.

After a press conference held to kick off the biannual Dosso Dossi Fashion Show in the resort city of Antalya, Eraslan said textile firms from China, India and Italy have met business delegations in Russia in a bid to utilize the absence of Turks in the market. “There is a Russian perception that Turkish products are of higher quality,” Eraslan said, adding that the opportunity that this opinion gives might now be missed following the jet crisis.

The Russian sanctions include tightened custom checks on textile products after Turkey shot down a Russian jet.

Turkey shot down a Russian fighter jet over an airspace violation along its Syrian border on Nov. 24, an unexpected development that has prompted Moscow to introduce a number of economic sanctions against Turkey in retaliation. Having officially banned many fruit and vegetable imports from Turkey, the sanctions also included tightened custom checks on textile products, which has resulted in Turkish trucks lining up along the Russian border, unpaid invoices and the cancellation of orders.

Eraslan said the textile sector also expects a direct ban effective Jan. 1 if there are no signs of easing the spat.

“We made $55 million in revenue at the previous fair [in June], but aim to reach $50 million this time around,” Eraslan added.

According to official statistics, Turkey’s ready-to-wear textile exports have already slid by 10.3 percent year on year in the first 11 months of 2015, totaling $15.6 billion. The jet crisis, meanwhile, came amid the downturn in foreign sales. The total volume of Turkish exports dropped by 8.6 percent to stand at $132 billion between January and November, compared to the same period a year ago.

Gathering Turkish manufacturers and thousands of client firms from different countries twice a year, the Dosso Dossi fair serves as an intermediary platform in supply chains where the products end up in Russia, Belarus, Kazakhstan or elsewhere.

Russian firms attending have dropped from 1,500 to between 1,000 and 1,100 when compared to the previous fair, Eraslan said, adding that the holding received calls from several participants who wanted to inform them that they would not be in attendance at the fair.

Manufacturers undersell for survival
The press conference was also attended by two textile producers who have been working with Dosso Dossi for years: Talat Kümek, an employer of 200 workers, and Behçet Kaya, with between some 300 employees, who both said they had to mark down the selling price of their products. While Kümek said he reduced the prices by 25 percent on average following the jet crisis, the corresponding rate was as much as 50 percent for Kaya. “We do not believe that the coming period will be fruitful,” CEO Eraslan said, underlining that small firms will see bleaker results if the crisis lingers on.

Owners of textile shops in İstanbul’s Laleli district also told Sunday’s Zaman earlier this month that they had to knock down their prices in order to recoup losses amid the rising bargaining power of their customers.

Ex-Soviet states to pursue prohibitive policies
Since Russia still maintains its grip over former soviet countries, embargoes aimed at Turkey are expected to spread to such countries as well, Eraslan said. Belarus has already followed suit and banned chartered flights to Turkey, also restricting the access of some Turkish products. “This is not only the Russian crisis. If the crisis shows no sign of calming down … People in Kazakhstan and Kyrgyzstan are all watching Russian TV channels instead of their own,” Eraslan said and spoke of his hope for a resolution in the near future.

When asked if Turkish textile producers could diversify their export partners, Eraslan underlined that the main collections of Turkish sellers are designed for Russian consumers, who have been loyal customers to Turkey for years.

Source: Today’s Zaman

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