According to just-style, Turkey is aiming for increased export growth in 2014, mainly to EU markets. Although the cost of sourcing apparel from Turkey averages 30-40% higher than countries such as China and India, quicker lead times as well as Turkey’s ability to offer shorter runs are proving to be beneficial for European retailers. Despite increasing pressure on price from European retailers, Turkey’s clothing industry is still expected to grow during the upcoming year. Another factor Turkish apparel manufacturers benefit from is the depreciation of the country’s currency, the Lira. Depreciation of the Lira could potentially act as an advantage for Turkish apparel manufacturers, making apparel sourcing from Turkey more price competitive for European retailers.
By MacKenzie Cahoone
Source:Dyson, Jonathan. “Turkey looks to strong clothing export growth in 2014.” just-style Global News. 15 February 2014. http://0-www.lexisnexis.com.helin.uri.edu/hottopics/lnacademic/?verb=sr&csi=343994.
7 thoughts on “Export Growth Expected from Turkey in 2014”
Good post! According to the ITKIB, Turkey’s textile and apparel (T&A) exports reached $8.39 billion in 2013 (7% increase from 2012), accounting for 5.5% of Turkey’s total merchandise exports of that year. Among the specific product categories, apparel accounted for 33.8% of Turkey’s total T&A exports, followed by yarns (20.7%), fabrics (20.0%) and fibers (7.7%). 45.6% of Turkey’s T&A exports went to EU, which is the single largest T&A export market for Turkey. Besides the geographic factor, EU and Turkey reached a customs Union agreement which came in force on December 31, 1995. The agreement provides preferential market access treatments (such as lower tariff rate) for Turkey’s T&A products in the EU market. At the country level, in 2013 Turkey’s top export markets for T&A include Russia ($1.1billion), Italy ($837 million), Germany ($445 million), Romania ($329 million) and UK ($321 million). Turkey’s main competitors in the EU market include Egypt, Pakistan and other Eastern European countries.
Although Turkey’s cost of sourcing is 30-40% higher than other countries, I believe the projection for increased exports is very plausible. In an earlier article about issues that the textile and apparel industry will face, it mentioned that styles and consumers interests are now rapidly changing. To address this issue companies will have to decrease their inventory and decrease the time it takes to get their merchandise. This issue will contribute to Turkey’s projected export growth because they are closer to the EU than countries like China and India. Although China’s and India’s sourcing costs are cheaper, Turkey has a competitive advantage because they are closer to the EU and can get the merchandise there quicker. The decrease in the value of the Lira will only give Turkey more of an advantage in competing with China and India and meeting their goal.
With Turkey’s sourcing costing 30-40% higher than most other countries and the depreciation of the Lira, Turkey may soon have the upper-hand. Offering shorter-runs over China and India may cause European countries to choose Turkey over them. They are also located much closer making time even quicker.
The prediction for Turkey to increase export growth in the year 2014 is very likely. Although Turkey’s sourcing costs are 30-40% higher than other countries, like China and India, I believe that most European countries will start to move towards the Turkish manufacturers. European retailers in today’s economy are more concerned with faster lead times and getting the product as fast as possible which is what Turkey is able to provide. These companies are making up for paying high prices with getting their apparel at a fast pace. This means that retailers can sell their inventory and receive their income even earlier than usual.
Reading this article I can relate it back to all three of our Case Studies. Although the costs are 30-40 percent higher, Consumers demand requires “fast-fashion” and Turkey is giving them just what they want. With this in play, Turkey’s industry is growing. The depreciation of the Lira is one of their advancements on Europe. In the future years to come, Turkey will continue to grow and become a tougher price competition for Europe.
I believe that Turkey’s projection to increase exports is extremely likely. Textiles and apparel are the core of the Turkish economy.The production of textiles in Turkey dates back to the Ottoman empire.Being a cotton producing country facilitated the move from textiles to apparel. Industrialization paved the way for the modern day apparel industry in Turkey.Today, Turkey is considered to be one of the top leading exporters globally and production capacity has continued to grow. Currently, Turkey is the second largest supplier of textiles and apparel to the E.U. Besides large manufacturing facilities; there are also thousands of small and medium enterprises that will facilitate this growth expectation. Educational seminars and training activities provide workers with the skills that are needed to continue competing in this sector. The goal is to increase production and remain in a leading position.
During the 1980’s, management of the exchange rate was key in Turkey’s competitiveness. Depreciation of the lira provided Turkey with a comparative advantage. The devaluation contributed to the growth of exports.Incentive programs also played a role in the development of the Turkish textile and apparel industry.
I agree with the article and the above comments that Turkey is likely to see considerable growth in the coming years when it comes to the export of fashion. Although Turkey’s sourcing costs are about 30-40% higher than those of China or India for example, I believe they still have the upper hand. One benefit to sourcing in Turkey above their competitors is their ability to provide quicker lead times and shorter runs. This relates us back to the idea of fast fashion, something we have discussed many times in this class. Retailers and consumers are more likely to pay more for their products if it means it will get to them faster. Another benefit to sourcing in Turkey is the depreciation of the country’s currency, the Lira. The depreciation of the Lira means that sourcing in Turkey is likely to become more price competitive. A price competitive market plus the idea of fast fashion is why Turkey will soon be placed above its competitors meaning Turkey will see a great deal of growth in the future.