The war began to hit the economy: agriculture, tourism, trade, textiles, shipping…

Regarding the peace negotiations with Ukraine, Russian Foreign Minister Lavrov said, “I have no doubt that a solution to the crisis will be found.” Although he says, he keeps the nuclear threat alive, and on the other hand, he explains that economic sanctions will not deter his country from the “secure-seeking” war.

The war between Russia and Ukraine, Turkey’s two main markets in agriculture and tourism, started to affect all sectors.

The drop in the price of Brent oil from $119 to $115 is no consolation. As the war and uncertainties drag on, it reminds us that the worst is not over in the CPI inflation, which rose to the level of 54.4% announced today. The increase in Turkey’s energy costs, on the one hand, carries the inflation to 70% and above, on the other hand, it creates an increasing effect on the current account deficit. The fact that TL is under pressure and possible depreciation means that the Treasury’s interest expenditures will increase through KKM towards the summer months.

Apart from the financial markets, the effects of the war have already begun to be felt in the real sector. Ali Ekber Yıldırım reminded him from his column in Dünya Newspaper that the stocks of sunflower oil would be sufficient at most 1.5 times and that price hikes are inevitable due to the absence.

Textile industry in shock

On the other hand, as a result of Russia’s war on Ukraine, operating in both countries in the apparel and apparel industry While the sales of Turkish brands in nearly a thousand points are declining, cancellations and postponements are spreading to European countries with a domino effect. The West’s disconnection of Mastercard and Visa, which are international payment systems, with Russian financial institutions within the scope of Russian sanctions, reduces the sales of Turkish companies in Russia.

According to another news of the World, prices have also increased due to the devaluation in Russia. While price increases were experienced due to the sudden increase in exchange rates, it was stated that shopping malls were also serving with 50% capacity as a result of frequent sabotage notifications. Currently, one of the biggest problems is that Russians cannot use their credit cards in Turkey and they have to make cash purchases, and there is a 7 thousand TL limit for shopping.

According to the information given by the brand representatives, there is a significant decrease in sales in Poland, Belarus, Moldova and Romania. It is stated that there are also order cancellations from Greece, Italy and Bulgaria, where Ukrainian and Russian tourists are concentrated. Mustafa Gültepe, President of Istanbul Ready-to-Wear and Apparel Exporters’ Association, said that order cancellations started to come gradually from the surrounding countries. Gültepe said, “There are slight delays in countries such as Poland and Bulgaria. People are cautious. In such cases, consumers first delay their shopping for retail products such as ready-made clothing,” he said.

How the trade between Turkey and Russia will continue without SWIFT is another issue on the agenda.

While signals of a return to suitcase trading are almost starting to appear, it seems inevitable that this retracement will bring down the total amount of trade.

Ramazan Kaya, President of the Turkish Clothing Manufacturers Association, explained that the textile centers of Laleli, Osmanbey, Merter and Zeytinburnu are the regions most affected by these developments in terms of production. Explaining that the production is mostly in the Merter Region and the fabric is supplied from Zeytinburnu, Kaya stated that the production has stopped due to the inability to send products to neighboring countries such as Belarus as well as both countries, and this will lead to a decrease in the sector’s capacities.

A hard blow to tourism: Besides Russia, there is also Europe

After the payment problems, the reservation slowdown was also reflected in the European tourists. The removal of Russian banks from the SWIFT system and the blocking of Russian financial institutions after the sanctions of Visa and Mastercard led to a payment crisis in tourism. Hotels cannot receive early booking payments.

Ülkay Atmaca, President of the Professional Hotel Managers Association (POYD), pointed out that there are serious decreases in early reservations in Russia. Atmaca said, “We are closely following the talks between the two countries. Tourism loves peace. We expect the two countries to leave the table by shaking hands. Because these two countries are our best market in tourism. Even if Russia is less, the Ukrainian market is completely over. This war is not an ordinary war. “Tourism means peace,” he said.

Osman Ayık, the previous term president of the Turkish Hoteliers Federation (TÜROFED) and Advisor to the Antalya Metropolitan Municipality, said that canceling early reservations would not cause any problems, and that the main problem was that the planes did not take off. Saying that this will affect the industry badly, Ayık said, “If the planes do not take off due to the sanctions, there will be great trouble. An indispensable part of the tourism industry is the airplane. If you can’t transfer money, you can’t do this job either. “Our only wish is for the crisis between Ukraine and Russia to be resolved,” he said.

After the payment crisis, bad news for tourism came from Europe. Bookings from European tourists also slowed down after the Russian invasion of Ukraine. President of the Association of Turkish Travel Agencies (TÜRSAB), Firuz Bağlıkaya stated that reservations from Russia and Ukraine have stopped and there has been a serious decline in Europe.

According to Baglikaya, entering the season under war conditions will be a very difficult situation. “2022 was a year where we expected a record higher than 2019, and so were the bookings. Hopefully, if he recovers in a short time in March, considering that the season has not started yet, we will have a chance to get through without major injuries. But there is no reservation flow at the moment. If it continues, there is a slowdown in Europe due to uneasiness, and everyone is acting a little cautiously. It will also determine whether the war continues and how it will continue,” he adds.

Trucks on the black market, freight on the rise in exports to Russia

Since the Ukraine line was closed, more than 20 km of truck queues formed on the Georgian-Russian border. As the exporter could not find a truck to send their goods, the freight increased by nearly 50% in a week. Sea transportation is also at a standstill.

More than 50% of export shipments from Turkey to Russia are done by road. There are approximately 40 thousand truck trips from Turkey to Russia annually. Nearly 60% of these transports were carried out via Ukraine. When the Ukraine line was closed after the war, almost all of the volume was directed to the Georgia line, which is an alternative route. According to the information received from the International Transporters Association (UND); Since the capacity of this line is limited and entrances to Russia are not as easy as before, more than 20 km of queues formed at the Georgian-Russian border at the Verhniy Lars Gate. And this queue is getting longer and longer. 20 km queue means more than a thousand trucks are waiting. It is stated that more than half of the waiting vehicles are trucks leaving from Turkey. In the words of the exporter, the truck has fallen into the ‘black market’.

The share of both export and import shipments in air cargo between Russia and Turkey is 2%. Ukraine’s airspace is closed. There are no operations related to the airline departing from and arriving in Ukraine. Flight routes have been changed so that they do not pass through Ukrainian airspace. The EU has banned Russian planes. It closed its airspace to the countries that banned it in Russia. Asia-Europe air cargo shipments began to be made over the Middle East airspace. Air freight and passenger transportation between Turkey and Russia continues. Turkish Airlines, Russian Airlines, Azerbaijani and Iranian airlines are among the companies that continue to deliver air cargo to Russia. However, an increase in freight is expected as capacity is reduced and there may be a shift to air from other modes of transport. The increase in oil prices will be another factor that will increase the freight.

The share of the railway in transportation between Russia and Turkey does not exceed 1% in both directions. Very few companies were carrying out railway transportation between Turkey and Russia. However, due to the fact that the Russian railway company is on the sanction list of the West and the security problem in the region, there is no railway transportation between Turkey and Russia at the moment.

While the share of maritime transport is 45 percent on the export side of transports between Turkey and Russia, this rate is 94 percent on imports. Transports on this line are made by coaster ships. However, due to the war, the ship voyages came to a standstill. Ukrainian ports are completely closed. On the Russian side, since the Sea of ​​Azov is closed, this region cannot be visited, but in the East, ports such as Novorossiysk can be visited. However, most shipowners do not go because they do not want to take risks. On the other hand, there are many cancellations in freight connections. Coaster shipowners were the segment most affected by the developments in the region on the transportation side.

Fresh fruit and vegetable exports stopped

Trucks that set out for the export of fresh fruit and vegetables to Ukraine were turned halfway and diverted to other countries. With the slowdown in exports, vegetable prices began to decline in Antalya wholesale markets.

Western Mediterranean Exporters’ Association (BAIB) President Ümit Mirza Çavuşoğlu said that exports to Ukraine have stopped. Expressing that exports to Russia continue and that some products are sent to Ukraine via Belarus, Çavuşoğlu said:

“30 trucks were going to Ukraine from Antalya daily. Currently, exports to this country have stopped. Tomato prices fell from 16 liras to 5 to 7.5 liras. Prices will decrease further in May. The grower had removed the California pepper in the greenhouses and planted tomatoes in its place. Production will increase with the spring. Tomato prices will not cover the costs. There is no chance of balancing the prices. We expect the war between the two countries to end and peace be restored as soon as possible. We will face great difficulties in the coming days. Manufacturer and exporter miserable. Exports to Ukraine have stopped, in Russia we are very negative.”

Kumluca Commodity Exchange Chairman Fatih Durdaş stated that 70 percent of the exports from the region are made to Ukraine and Russia. Durdaş said, “Airports and shopping malls customs gates are closed in these countries. We are racing against time. It would take time for the TIRs going from Antalya to these countries and returning from the road to return to the Antalya customs gate. During our meetings with our General Manager of Customs, we had it checked again at Edirne Customs Gate. Thus, the trucks destined for Ukraine and Russia were directed to the markets of non-war countries such as Kosovo, Romania and Bulgaria. More than 100 trucks are currently waiting. (As of March 1) Because there is plenty in these countries, too,” he said.

Wheat Wheat…

After the ship exits stopped due to the war between Russia and Ukraine, the price increase in wheat, of which both countries are major producers, accelerated. The Turkish Grain Board increased the cost of TMO by $100 per ton.

TMO, which has purchased 2.3 million tons in 8 tenders held since the harvest period last year, received offers within the scope of the 9th tender yesterday. However, when the departure of ships from Russia and Ukraine stopped, only those who had products in warehouses in Turkey bid for the tender. This situation led to the fact that the bids received for the tender of 435 thousand tons remained at 360 thousand tons.

TMO When it faced record prices in the import tender of 435 thousand tons of bread wheat, it bought only 285 thousand tons.

In the tender, which was priced between 408.90 and 517 dollars per ton, bids of 450 dollars and above were eliminated.

Thus, TMO will supply 285 thousand tons of wheat at prices varying between 408.90 and 449 dollars.

The cost per ton of TMO, which had purchased for 347 dollars in the last auction before this, will have increased by approximately 100 dollars.

Compilation – Dünya Newspaper

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