The USDA Foreign Agricultural Service now forecasts cotton planting area in Turkey to decrease to 350,000 hectares (ha) for the season 2020/21. This represents a considerable reduction in production area compared to the previous season. The production amount is now projected as 615,000 tonnes (2.825 million bales), compared to 740,000 tonnes in 2019/20 (official USDA estimate).

Several reasons contributed to the significant reductions in the planting area:

The mandatory rotation rule of the Turkish Ministry of Agriculture and Forestry (MinAF) forced some farmers not to plant cotton this season or they would not have been entitled to subsidies, as the same crop can’t be subsidized on the same land four years in a row. Another reason for the decreased planting area was that the Government of Turkey (GoT)’s 0.80 TL/kg subsidy established in 2018/19 was not increased for 2019/20, despite high inflation and the Turkish Lira (TL) losing value against major currencies. As of August 2020, the amount of the subsidy for the season 2020/21 has not been declared by GoT. The prices of production inputs such as fertilizer and pesticides increased due to the TL losing value. Meanwhile, cotton prices dropped in global markets going into the planting season too, encouraging more farmers to switch to alternative crops.

Covid-19 affected the choice of some farmers, as food became more important than clothes in retail markets. Many farmers chose to hedge their bets this year as they were unsure how this pandemic would affect global and domestic markets for textiles, hence cotton. Low yields, unattractive cotton prices, inflated costs, uncertainty created by Covid-19, and better returns from alternative crops in addition to not enough subsidies from GoT and the fourth-year rotation rule are the major reasons for the expected decrease in planting areas.

Weather conditions support good yields

Since the weather conditions have been better compared to the last season during both planting and growth stages, the production reduction compared to last season is lower than the cut in the planting area. Market sources indicate that there is no major pest problem seen in the Southeast Region (GAP Region), which seemed to be a problem last season.

Better Cotton Initiative (BCI) production is continuing to increase year by year and Turkey is expected to produce about 94 thousand tonnes of BCI cotton in 2020/21 according to the Better Cotton Practices Association of Turkey (IPUD).

Consumption to normalize in 2020/21

Although Covid-19 brought some European ready-to-wear/fast-fashion/textile orders from China to Turkey in January and February 2020, increasing the production of garments, as the pandemic started affecting Europe and Turkey in March, the utilization rates in the textile/ready-to-wear apparel industry dropped to less than 50 percent for three to four months. With some normalization in lifestyles in Europe and Turkey as of June 2020, capacity utilization rates and export numbers for the textile and ready-to-wear industry is also becoming comparable to the previous year. The USDA Foreign Agricultural Service now estimates the domestic consumption of cotton to be 1.4 million tonnes (6.43 million bales) in 2019/20. Assuming that adapted normalization of lifestyles without major lockdowns continues in Europe, the U.S. and Turkey despite coronavirus, 2020/21 consumption is forecasted to be 1,550,000 tonnes (7.1 million bales).

Source: USDA/FAS, Gain Report, 09/2020

Bremen Cotton Report Nr. 37/38