Coronavirus was the main agenda in exports

The effects of the new type of coronavirus on China’s production and foreign trade are being analyzed by exporters in Turkey, both positively and negatively.

While some global buyers are directing their orders to Turkish companies with the stoppage of factories in China, developments are closely monitored in the mining and natural stone sector, which exports heavily to this country.

The new type of coronavirus, which the World Health Organization calls Covid-19, continues to spread and take lives, especially in China.

After the extended New Year holiday in China due to the disease, the effects of the decision of many factories to suspend production began to be felt in world trade. Initial assessments of the effects of the outbreak on Turkey’s foreign trade differ according to sectors.

For example, the natural stone sector, which exports approximately 700 million dollars to China annually, is carefully monitoring the impact of the virus on the market. In China, which is by far Turkey’s largest customer in marble and travertine, the disruption of loading and unloading at ports and the stagnation of construction projects are reflected in shipments to this country.

Following the postponement of the Xiamen Natural Stone Fair in China, where Turkish exporters had made major contacts, it is unlikely that Chinese buyers will come to the Marble Natural Stone Fair to be held in Izmir on April 1-4.

“We send masks instead of natural stones”

Mevlüt Kaya, President of the Aegean Mineral Exporters’ Association, stated that they are the biggest sector negatively affected by the coronavirus in Turkey and that they started sending masks to China instead of stones.

Stating that they hope the outbreak will be taken under control, Kaya said, “We are in constant contact via China’s messaging application Wechat. They asked us for masks, we organized and sent 20-30 thousand pieces. It is a market with 700 million dollars of exports. Exports from the Aegean Region, which sends the most stone to China, shrank by 54.5 percent in February.”

Stating that production in quarries producing for the Chinese market has decreased, Kaya said that they have negotiated with the relevant ministries in order for exporters to come out of this process unscathed, and that they have made significant progress on issues such as the postponement of Eximbank loans and the structuring of debts to public banks.

1 million tons of additional exports

Apparel, steel and chemicals are among the sectors where major buyers in the EU and US markets are contacting buyers from Turkey instead of China.

In the ready-to-wear sector, Turkish companies, which produce woven fabrics and have a large capacity, are expected to play an effective role in filling the gap left by the cessation of production in China.

It is rumored that large European buyers are turning to Turkish companies especially for fast order products and that the empty capacity in the sector will be filled due to these orders.

Burak Sertbaş, President of the Aegean Ready-to-Wear and Apparel Exporters’ Association, argues that although order shifts have positive effects, their impact on the figures will be limited.

“We do not expect a boom in export figures,” Sertbaş said:

“We are watching the order increases of one or two global companies. We are actually also on standby. We will see how far this pandemic will go. There may be a negative view of the ‘Made in China’ label in the eyes of the consumer in Europe for a while. But the Turkish ready-to-wear sector does not have much spare capacity. The existing empty capacity can be activated in this process. But it is important that this is permanent in the future.”

Steel shipments accelerated

The iron and steel industry is one of the sectors that has seen the tangible effects of China’s slowdown.

In the last 15 days, Turkish steel exporters have accelerated their steel shipments to Asian and African markets as factories in this country, the world’s largest steel producer, reduced their production.

While the increase in steel product sales to African countries has reached 15 percent, new orders have started to come from Singapore, Hong Kong, the Philippines, Malaysia and Bangladesh, which Turkish exporters have had difficulty entering for a while.

Yalçın Ertan, President of the Aegean Iron and Steel Exporters’ Association, stated that if this trend continues, they foresee an addition of 1 million tons to the sector’s exports compared to 2019.

It is stated that Turkish exporters may be advantageous in sectors such as shoes, furniture and jewelry, which are among the sectors in which China is influential in world markets, but no large order return has been observed yet.

Food producers will prepare a roadmap

Promotional activities in the dry and fresh fruit and vegetable sectors, where Turkey has declared China as a target market, were suspended for a while.

Exporters in the food sector, who are monitoring the demands from the Chinese market, will determine a road map for this country in a week or two.

Birol Celep, Chairman of the Dried Fruit Sector Board of TİM, said that they do not know the stock situation in Chinese markets and that there may be some increase in exports to this country in certain products.

Celep noted that there may be a negative perception against Chinese goods worldwide in food, and new markets may open up for Turkish exporters in agricultural items, but it is still early for signs in this direction.

“It would be wrong if we look at it from a short-term window of opportunity”

ge Exporters’ Associations Coordinator President Jak Eskinazi pointed out that the coronavirus outbreak should not be viewed from the window of opportunity and stated that if the outbreak cannot be brought under control, it may reach a size that could affect the entire world economy.

Pointing out that as exporters, they have prepared plans according to different scenarios, Eskinazi said, “What will happen after April? Will this pandemic affect the growth of other countries? For example, there is talk that the German economy may be negatively affected by this situation in China, the largest import market. We need to see the whole picture, it would be wrong if we look only from the short-term opportunity window. However, what we see in all the scenarios we have done is that Turkey will be one of the countries in the world that will be least affected by this pandemic in economic terms.”

Container shortage will increase freight prices

One of the indirect effects of the coronavirus on the Turkish economy is the freight prices.

It is stated that there are disruptions in container traffic worldwide due to the inability to load and unload in Chinese ports, so there are problems in finding empty containers for exports in Turkey.

Taner İzmirlioğlu, Member of the Board of Directors of the International Transportation and Logistics Service Producers Association (UTİKAD) and Assembly Member of the Izmir Branch of the Chamber of Shipping, pointed out that the world container traffic was negatively affected due to the problems in loading and unloading in Chinese ports after the epidemic.

Pointing out that this has reached a level that will increase freight prices, İzmirlioğlu said, “The container, which should normally circulate around the world, is waiting in China. This causes problems for Turkey in finding the containers it needs. Shipowners started to increase freight rates because they had to bring empty containers. One of the big well-known shipping companies announced that they will increase their prices by 100 dollars for 20 containers and 200 dollars for 40 containers as of the beginning of March. This means that our export cost will increase between 5 and 25 percent depending on the destination.”