The Turkish lira has been rather volatile over the past few months. With the Turkish elections finished, exporters hope the situation will calm down. However, as some of the Turkish exporters have explained, there are also opportunities to take advantage of and extra profits to be made. As exporters now receive more Turkish liras for their euros, more money can be made. However, if this situation goes on for much longer, it could also backfire. Turkish exporters need to import fertilizers and other such products, which effectively have become more expensive due to the Turkish lira dropping in value.
Kerem Baltu, export manager of Turkish fresh produce exporter Tumen Tarim acknowledges the situation has been very good for them: “The currency effectively increases the export of our products. It’s easier to sell out product and both costumer and exporters are happy with the current situation. The exporter will want to sell more product. Because until payment is made, the value of the foreign currency may increase, which in turn increases the profit for the exporter. That said, there is also a risk of the Turkish lira increasing in value and decreasing the profits. However this possibility doesn’t seem very likely in the near future. We are a producer and exporter, with a focus on the wholesale markets and local supermarkets. But, due to the current currency situation we are considering shifting our focus on exports to take advantage of the possible profits.”
“It's not like it’s all just positive though, there are quite a few disadvantages of the Turkish lira’s situation. Inflation is increasing in our country and thus workers, labels, packing materials and transport costs all increase as well. This affects the exporter in a negative way. For us, it means more costs for the fertilizers, fuel as well as our labour.”
According to Ahmet Mert Yazıcı, who does marketing for FEA Foreign Trade, the situation with the Turkish lira has actually made things very hard for them: “The volatility of the Turkish lira makes it difficult for exports, because it stays at the top in terms of price performance and we cannot do business. We can’t sell our products faster, because foreign buyers do not buy because the prices are higher than the general prices, as a result, exports slow down. We do expect a little more activity in the upward direction, if this happens, the prices may come down a little and we can sell our products as before. The current situation with the Turkish lira harms our business in terms of sales. Product costs increase in Turkey and as a result, the price of the product sold increases as well. While the Turkish lira is volatile, it makes our sales difficult.”
Alper Kerim of Turkish fresh fruit exporter Demir Fresh Fruits states that it did not have an impact on the company’s apple season. However, it could have consequences for the current cherry season, he explains: “The volatility of the Turkish lira did not impact the current apple season, because we had already come to the end of the apple season and all our shipments were mostly done by the time things got really unpredictable. During the apple season itself there wasn’t too much volatility in the currency and we were pretty safe to do business. However, for the cherry season the current situation will affect our export in positive way.”
“One can take advantage of the current situation with our currency by selling faster of course, but for next season it will not be helpful for us, because next season the growing costs and producing costs will be increased as well. Turkish production needs to import the fertilizers or pesticides, so if the foreign currency value increases so do your costs, automatically. I prefer minimum volatility in the Turkish liras during the season. A lot of volatility means that economy is not stable and things could take a turn for the worst. For exporters it can be seen as an advantage, but to me, in the long term it is not an advantage.”
For more information:
Kerem Baltu
Tümen Tarim
Email: kerem@tumen-tarim.com
www.tumentarim.com
Ahmet Mert Yazıcı
FEA Foreign Trade
Email: fea@feaforeigntrade.com
www.feaforeigntrade.com
Alper Kerim
Demir Fresh Fruits
Email: alper@dff.com.tr
www.dff.com.tr