As part of the Preferential Trade Agreement signed between Turkey and Uzbekistan, customs duties on imports of a number of goods from Uzbekistan were canceled, UzDaily.uz reports. The decision and order will come into force on July 1, 2023.
For EastFruit analysts the most important products included into this trade liberalization agreement are onions and plums. Thus, we decided to evaluate the potential impact on mutual trade.
According to EastFruit, Uzbekistan and Turkey both are among the top global exporters of plums, sharing 7th position in the global ranking of exporters. Uzbekistan exports annually between 20 and 50 thousand tons of plums, depending on a harvest and Turkey exports more stable volumes averaging 45-47 thousand tons. None of the countries is exporting plums to each other – they are mostly competing on the market of Russia. Thus, EastFruit estimates there will be not major impact of this trade liberalization for plums.
It is a lot more interesting for onions. Both countries are again among the top global exporters of onions and both countries export annually around 200,000 tons of these vegetables. Interestingly enough, both: Uzbekistan and Turkey banned onion exports in the winter of 2023 trying to prevent further price increase for this product, which was in an unusually high demand in Asia and Europe in 2022/23 season. Both countries were trying to import onions in the winter of 2023.
While Uzbekistan has lifted export ban for onions in March 2023, Turkey maintained it. Consequently, although countries have not sold onions to each other in the past, in the 2022/23 season there were a lot of opportunities for mutual trade in this category, which means that these opportunities could arise in the future as well. Therefore, we think that onion trade liberalization might lead to occasional trade between the countries and will help prevent price peaks in the seasons when there is a shortage of onions.
In the meantime, the produce markets are preparing to deal with another problem on the global onion market – an emerging onion bubble. Motivated by very high onion prices in the 2022/23 season farmers across the globe have expanded the area of this crop to new records. Consequently, EastFruit analysts warn the market participants about a possibility for sharp onion price collapse from August 2023 onwards.
For more information: east-fruit.com