Cancellation of 200 million dollars in the ready-made clothing industry

After the war that started with Russia’s attack on Ukraine, the sanctions applied to Russia, especially SWIFT, and the depreciation of the Ruble affected the purchasing tendencies in this country. This situation brought Turkey’s ready-made clothing exports to a standstill.

After Russia declared war on Ukraine last week, the effect of the economic sanctions announced by both the USA and the EU against Russia was first seen in the ready-made clothing industry. While 267 stores and 180 sales points of 24 brands operating in Ukraine were completely closed, an uneasy waiting period began at 655 stores and 2,556 sales points of 32 brands operating in Russia.

According to the news of Yener Karadeniz from the World, the sector representatives stated that the negative economic environment in the country first caused a recession in the shopping of ready-made clothing and similar products. In Russia, ready-made clothing shopping and exports have come to a standstill.

According to official figures, last year, 173 million dollars were exported to Ukraine and 287 million dollars were exported to Russia. However, both countries export mostly with passengers, and while the figure in question reaches 750 million dollars in Ukraine, it exceeds 1 billion dollars in Russia.

The sector, which participated in the fair in both countries last month and made extensive business connections, had the goal of increasing official exports to Russia from $287 million to $1 billion.

Laleli and Osmanbey were affected the most.

Laleli and Osmanbey regions, which export the most to both countries. About 50 percent of the passenger-joined sales made only in Laleli are made to Russia and Ukraine.

Şeref Fayat, President of TOBB Ready made Clothing and Apparel Sector Assembly, said that the most obvious problem was in the Ukrainian market and that cancellations and postponements in exports to the region amounted to 150-200 million dollars. Fayat said, “Recently, there were two fairs in both countries where important business contacts were made. As the shipment to Ukraine has stopped, there is an uneasy expectation in Russia. Since more passengers are traded in the two countries, it is not subject to many swift transactions, but there will be no problems in the payment system in our official trade. It is bought from jewelers, the passenger is set off with the accompanying cash or otherwise.”

No insurance in Russia and Ukraine

Mustafa Gültepe, President of Istanbul Ready-to-Wear and Apparel Exporters’ Association, stated that more than 1.5 billion dollars were exported to the two countries together with the passengers, and said, “We hope that peace will be achieved between the two countries as soon as possible. However, just as the trade in Ukraine has completely stopped, there are also cancellations and postponements in Russia. “People want to see the front,” he said. So, is there an insurance in the sector for cancellations and postponements? Mustafa Gültepe explained that there is usually a trade based on trust, except for a very small limit, in the picture as well as with the passenger.

Gültepe stated that they will have problems with Swift, and that currencies can be used by taking all kinds of risks in the trade that will continue. Gürkan Tekin, President of the Mediterranean Ready-to-Wear and Apparel Exporters’ Association, stated that the trucks are currently waiting at the border, and said, “The first sector to move away from at the slightest problem is ready-made clothing. Therefore, the industry is severely affected right now. There is no insurance outside of registration, and in official sale it is not covered by insurance. Insurance is mostly in the EU region. So there will be serious impact. Currently, exports are at a standstill,” he said.

Laleli caught in the open, production stopped

Textile centers such as Laleli and Osmanbey are the regions that will be most affected by the Russia-Ukraine war. In Laleli, where a crisis desk was created on the subject, the number of Ukrainian guests, which was 253 on Thursday, has exceeded 500. The number is increasing day by day.

Gıyasettin Eyyüpkoca, President of LASİAD, said, “There is a trade close to 3 billion dollars in Laleli. Nearly half of this is done with two countries. Trade between the two countries has stopped. There is also the issue of open accounts. There are also those who have been working with two countries with an open account for years. There are order cancellations. We estimate that cancellations and postponements even exceed 200 million dollars. This also affected the production, the workshops are at a standstill. There are order cancellations even from Poland because there is a border. As if we will be the country that will be most affected by this situation. The share of the two countries in the trade in the region is 50 percent. Half of the market in Laleli is in danger,” he said.

Osmanbey Textile Business People’s Association (OTİAD) President Eda Arpacı stated that after the military operation launched by Russia in Ukraine, they carried out a study on what kind of problems were experienced in Osmanbey regarding orders, shipments and collections, and what is expected. There are order cancellations in both countries. Goods cannot be shipped to Ukraine. On the other hand, shipments are made to Russia, but shipments are pending. There was a fair in Moscow. $287 million was expected to grow to $1 billion. In this uncertainty environment, our priority is to create a peaceful environment without harming the peoples. Only then will we be able to determine the extent of the damage.”

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