How much impact will the Turkish earthquake have on the international textile industry?

The strong earthquake in Türkiye affects people’s hearts. On February 6, multiple strong earthquakes occurred in southern Turkey and the border area with Syria, causing serio…

The strong earthquake in Türkiye affects people’s hearts. On February 6, multiple strong earthquakes occurred in southern Turkey and the border area with Syria, causing serious casualties and property losses.

▲A 7.9-magnitude earthquake occurred in southern Turkey on February 6 | Picture: Reuters

The earthquake also caused heavy damage to the Turkish economy. Among them, the Turkish textile industry, which accounts for one-tenth of Turkey’s GDP, was also affected by the earthquake to a certain extent. In 2022, Turkey’s textile and garment exports will reach US$34.4 million and are an important part of the country’s economy.

Judging from Turkey’s location conditions, the impact of this earthquake may even affect the global supply chain.

Türkiye is an important textile producer and exporter in the world

On February 7, the Turkish securities trading platform Borsa Istanbul disclosed on the public platform that the strong earthquake centered in Kahramanmaras province had affected 10 provinces in Turkey, and the company decided to terminate its trading in Stocks of companies in the earthquake zone were trading until the companies made special disclosures about how they were affected by the earthquake.

Among these companies that have suspended stock trading, Turkish textile news media Textilegence reported that eight of them are textile and apparel companies. These companies include textile material suppliers and OEMs such as cotton and cotton textiles, polyester fiber and related textiles. Their customers include well-known European brands such as H&M, ZARA, Puma, Burberry, Louis Vuitton, etc.

According to data from the Turkish Ministry of Commerce, as of 2021, Turkey is the world’s sixth largest producer and exporter of textiles and apparel. The country’s textile industry is particularly important to Europe. It is the EU’s third largest source of textile and garment imports, and the EU is the largest exporter of Turkey’s textile industry.

Data in 2021 show that Turkey’s textile and garment exports to the EU reached US$129 billion that year, a year-on-year increase of 33.8%, setting a record high. For EU textile retailers, Turkish cotton woven fabrics, knitted or crocheted fabrics, floor coverings, tapestries and tablecloths, and home textiles are competitive in the global market.

Therefore, once the Turkish textile industry is shut down, it will have a greater impact on downstream companies. While the above-mentioned companies suspended stock trading to assess the damage caused by the strong earthquake, a spokesperson for the IHKIB Istanbul Apparel Exporters Association said on the first day of the earthquake that the organization was trying to confirm the potential impact of the earthquake on the textile and apparel industry. Influence.

To what extent has the international textile industry been affected?

An IHKIB spokesman said: “Since the textile industry is mainly concentrated in the Istanbul area, we do not expect (the earthquake) to have a substantial impact (on the Turkish textile industry). However, we are still clarifying the specific impact of the earthquake.”

It is reported that in recent years, some European and American brands have reorganized their supply chains globally and transferred some orders from regional markets such as China to other countries. For European brands, the Istanbul textile industry, which is at the core of the junction of Europe and Asia, happens to take on some of the orders that were transferred from the previous production areas.

Istanbul is Turkey’s largest city and the center of the country’s economic life. Due to its location at the intersection of international land and sea trade routes, Istanbul has been the core area of ​​the country’s textile industry for nearly a century. A large number of textile processing, clothing manufacturing and trading companies have gathered around Istanbul.

The Turkish Ministry of Commerce mentioned in the 2022 Textile Industry Report that as Istanbul has become a fashion and shopping mall, most textile companies have moved production to the interior provinces, including Bursa and Tekirdag, which are very close to Istanbul. , as well as cities in northwestern Turkey such as Denizli (Denizli) are the main cities in the country’s textile and clothing production. Data show that the scale of textile and clothing production near Istanbul accounts for about 75% of the country’s exports.

The epicenter of this strong earthquake in Turkey is located in the Kahramanmarash province of Turkey and the Gaziantep region close to the province. It is expected that the direct impact on the textile industry in Istanbul and northwest Turkey will be limited.

However, it is worth noting that the Gaziantep region, which was greatly affected by the earthquake this time, has also developed into an important textile region in Turkey in recent years. Textile industry think tank CCFgroup cited data showing that 7% of Turkey’s textile companies and workers come from the region. Transportation and logistics disruptions, house collapses and equipment damage caused by strong earthquakes in this area are expected to affect manufacturers in the region to varying degrees, although the extent of the impact still needs further evaluation.

However, among the large Turkish textile companies that have suspended stock trading, polyester fiber manufacturer Sasa Polyester, jeans manufacturer Bossa, and cotton and cotton textiles manufacturer Rubenis Tekstil have issued statements stating that their factories in areas closer to the epicenter have not been closed. Affected, production continues. Sasa Polyester and Bossa both have production bases in Adana.

Strong earthquake may affect global industrial chain

Judging from Turkey’s location conditions, the impact of this earthquake may spread around the world. Turkey is known as the crossroads connecting Asia, Europe and Africa and is also a major transportation artery.

According to CCTV News, affected by the earthquake, some containers collapsed at the Iskenderun Port in Hatay Province, causing a circuit failure and a raging fire broke out. As of the morning of February 7, local time, the fire in Iskenderun Port was still continuing and spreading to many areas of the port. Operations at the port of Iskenderun have been suspended due to damage caused by the earthquake, Reference News reported.

The Port of Iskenderun is the second largest port in southeastern Türkiye. Search navigation network shows that there is a deep-water jetty terminal in the Iskenderun port area that can dock three 10,000-ton ships at the same time, and there are two floating oil tanker berths. Not far to the northwest is Golowasi (G), the terminus of the Iraqi oil pipeline. -OLOVASI) has two berths each for 150,000-ton and 300,000-ton oil tankers. In addition to crude oil, the main imported goods include food and industrial products, while the main export goods include grains, olive oil, cotton, wool, fruits and ores.

In addition to the port of Iskenderun, crude oil loading work at Ceyhan, Turkey’s main oil export terminal on the Mediterranean coast, was also temporarily suspended, but Turkish pipeline operator Botas said that neither pipeline was damaged. The latest news shows that Turkey has ordered the resumption of crude oil shipments to the Ceyhan export terminal. The previous suspension was only a precautionary measure. Data show that the port’s daily export volume exceeded 1 million barrels in January, accounting for 1% of global supply.

For the global market, Turkey’s geographical location determines that its role is relatively obvious. It is an important transfer station for crude oil and natural gas. After the earthquake, it may have a relatively obvious impact on the entire supply and demand of crude oil. For some The price of goods may also have a relatively large impact.

According to the Financial Associated Press, the earthquake in Turkey disrupted port operations and may affect its chrome ore exports. Data from Shanghai Nonferrous Network shows that Turkey’s chromium ore output in 2021 will be approximately 7 million tons, accounting for 16.9% of the world. According to customs data, China’s total imports of chrome ore from Turkey in 2022 will be 947,800 tons, accounting for 6.33% of total imports. Industry insiders believe that the current domestic chrome ore inventory is at a relatively low level in history. As the Southern Iron Works gradually resumes production in the future, the prices of raw ore, lump ore and other minerals are likely to rise. ​

Turkey is also a major transit point for grain exports from Eastern Europe. Istanbul has previously established a joint coordination center to ensure the safety of grain transportation. At present, the impact of the earthquake in Turkey on global shipping and trade is not yet clear, but some analysts pointed out that Turkey is located in a global shipping fortress, and the Bosporus in the middle is an important waterway for world freight. The earthquake suffered by Turkey this time may It will bring more uncertainty to the country and the normal navigation of the strait.

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Author: clsrich