Turkey fortifies imports wall a little more

Turkey fortifies imports wall a little more
By bne IntelIiNews June 9, 2020

Turkey’s trade ministry has published 38 communiques in the Official Gazette to change tariff rates on 150 products, business daily Dunya reported on June 7.

According to the newspaper’s data mining of the foreign trade codes in the communiques, the ministry has mainly changed the tariff rates on consumption goods and some items that have ‘final goods’ properties but are used in the production of other goods. A few raw material items are also affected.

Care products for children, lighting equipment, iron and steel wares, audio-visual equipment, furniture and measuring devices are among the items hit by the tariff adjustments.

Since April, Turkey has stepped up its import compression efforts but the desired fruits are not visible as yet—the May trade data suggests that the trade deficit was around $3.4bn, up 79% y/y and exactly the same level as seen in April.

The June data is awaited for gauging the impact of the latest tariff hikes.

Turkey’s exports fell 41% y/y to $9.4bn in May, marking a slim recovery from April’s $8.4bn.

The contraction in imports remained relatively limited, registering at 28% y/y to produce a figure of $12.8bn, a higher figure than April’s $11.8bn.

Imports of investment goods remained almost unchanged at $1.87bn compared to April while intermediate goods imports rose to $9.8bn from $8.8bn in April. Consumption goods imports were down to $1bn in May from $1.2bn a month ago.

Oil imports rose to $1.24bn from $908mn in April, making oil the country’s third largest import item compared to the fourth place it took in the previous month.

In April and May 2019, oil imports stood at $3.5bn and $3.6bn, respectively.

Oil has traditionally been the highest-value import item for Turkey, which is almost entirely reliant on imports to meet its energy needs, but the oil price crisis that has arisen in tandem with the coronavirus (COVID-19) emergency has pushed it down the ranking.

The government sells the oil price collapse as justifying the presented official inflation and current account data—but fuel prices for Turkish consumers and the trade deficit are on the rise and oil prices bounced back in May.

The largest import item remained machinery. The category was valued at $1.51bn, up from $1.41bn. It was valued at $1.88bn and $1.89bn in April and May last year, respectively. It seems that compressing machinery imports much further is not possible.

The second largest import item in May was gold, which was given a value of $1.44bn. This item is volatile. What kind of trades are happening in relation to it is unknown.

Iron-steel imports were down to $885mn from $945mn in April while there was still $851mn worth of consumer electronics imports, albeit the figure was lower than the $945mn in the previous month.

Data

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