TODAYSZAMAN – Sales to Iraq at 34-month low as ISIL’s aance hits trade

Sales to Iraq at 34-month low as ISIL’s aance hits tradeSales to Iraq, one of Turkey’s top exports markets, nosedived to their lowest point in 34 months in June, with ongoing fighting between insurgents and Iraqi government forces blocking easy access to the country. Turkish exports to Iraq suffered a 29-percent fall in June over May in an unprecedented reverse after months of gains in trade with the country, figures released on Friday by the Turkish Statistics Institute (TurkStat) revealed.

Exports to Iraq declined to $744.8 million in June, down from $1.

05 billion in the preceding month. Following the decline, Iraq, which has risen to become Turkey’s second biggest export market after Germany in recent years, fell to third spot on the list of top buyers of Turkish goods.

The year-on-year decline in exports to Iraq in June was 19.3 percent.

 Data shows that Turkey is losing ground in the once-lucrative Iraqi markets due to the violent clashes between the Islamic State in Iraq and the Levant (ISIL) and government forces. Turkey’s trade balance took a painful hit after the ISIL insurgents took Basra, Iraq’s second largest city, last month.

Ankara is left with few options to help solve the crisis, with ISIS has so far showing no signs of releasing 49 Turkish citizens it took captive on June 10. Iraq has gained particular importance for Turkish exporters over the past few years as the country rebuilds its economy after decades of war and sanctions, and Ankara has sought to diversify its trade away from dependence on Europe.

 In December 2013, Turkey sold goods worth $1.21 billion to Iraq, a historical record in exports to that country.

The southern neighbor’s share in overall Turkish exports was 925 percent in December last year and this figure dropped to 576 percent in June, the lowest in 35 months. Exports to Iraq, mostly to the autonomous Kurdish enclave in the north of the country, have been growing in the double digits since 2005, at times in excess of 30 percent.

Exports worth more than $5 billion were shipped to Iraq in the first five months of this year, broadly in line with volumes in the same period a year earlier, before the insurgency flared. Food, building materials and refined fuel are among the main products going across the border by road.

  Trade gap closed less than expected Turkey’s foreign trade gap narrowed less than expected in June, as sales to Iraq took a major blow and gold imports were relatively higher Turkey’s foreign trade gap declined by 88 percent to $7.2 billion in June from the same month last year, according to Friday’s TurkStat data This was still above the trade gap figure economists had estimated at $7 billion for June.

In June, imports declined 11 percent to $20.77 billion, while exports increased 42 percent to $12.

92 billion over the same month in 2013, the data showed. Turkish gold imports amounted to $1.

2 billion in June, the highest in six months. It was also well above the market predictions of $500 million for June.

 Turkey’s foreign trade deficit traditionally arises predominantly from an import dependency on energy and intermediate goods, especially oil and natural gas. The deficit narrowed to $39.

57 billion in the first six months, according to the data from TurkStat. The institute said exports grew by 67 percent between January and June of this year when compared to a year ago while Turkey imported 48 percent fewer products in the same period.

The decline in the trade gap comes on the heels of a relative jump in sales to Turkey’s traditional exports market, the European Union. Year-on-year, Turkey saw its foreign trade deficit narrow by 21.

9 percent between January and June this year over the same period in 2013 as exports surged and imports declined, the government data indicated.On a monthly basis, Germany maintained its place as the top importer of Turkish goods for the third consecutive month.

Turkey’s top four countries for exports last month were Germany, the United Kingdom, Iraq and France, respectively. The top four countries for imports were Russia, China, Germany and Italy, in that order Germany bought Turkish goods worth $1.

26 billion in April while Turkey made its biggest purchase from abroad from Russia, with $2.13 billion.

SOURCE: Today’s Zaman