Turkiye Weekly Watch

Food & Agriculture Special Issue Nov 26, 2013

REGIONAL CURRENCY EXCHANGE RATES USD 1.00 ILS 3.57 RUB 28.94 TRL 1.76 AZN 0.79 GEL 1.66

Executive Summary

Global Commodity Prices

As of November 22, 2013 Crude Oil Natural Gas Copper Gold Silver $81.23 $75.23 $56.98 Corn Soy $5.54 $34.53

Coffee $54.54 OJ Wheat

Upcoming Events
January 5 US Federal Reserve Meeting January 5 US Federal Reserve Meeting January 5 US Federal Reserve Meeting January 5 US Federal Reserve Meeting January 5 US Federal Reserve Meeting January 5 US Federal Reserve Meeting January 5 US Federal Reserve Meeting

Turkey eyes $100 billion trade volume with Russia by 2020

Turkish Foreign Minister Ahmet Davutolu, Energy Minister Taner Yldz, Economy Minister Zafer alayan, Transportation Minister Binali Yldrm, Culture and Tourism Minister mer elik are participating in the summit. Noting that military, commercial, economic relations with Russia are improving, Erdoan said they are planning to reach to $100 billion by 2020 from the current $35 billion in trade volume. He added that thanks to efforts of politicians and contributions of entrepreneurs, Turkey can achieve to this goal. The prime minister also noted that Turkey is ready to lend any type of support for Russias plan to build a cultural center in Ankara. He said Turkey also has a plan to open a similar cultural center in Moscow.

Addis Ababa mayor: Ethiopia can be major destination for Turkish investors
Speaking to Today's Zaman in an exclusive interview, the mayor stressed that there are many areas for investment in Ethiopia, especially in the fields of dam construction and hydropower, explaining that Turkish investors can find opportunities to invest in power and energy generation, agriculture, the metals industry, railway and road construction and airport infrastructure. Turkey's exports to Ethiopia were around $300 million in the first nine months of 2013, remaining steady over the same period of 2012. However, there has been a remarkable increase in Turkish exports to Ethiopia in the last three years. While Turkish exports to the African country were $174 million in 2010, they reached $395 million in 2012 with an increase of 125 percent. On the other hand, Turkey's imports from Ethiopia are low. Ethiopia exported goods totaling $47 million in 2012 to Turkey, with a $7 million increase over 2010.

Russian President Vladimir Putin and Turkish Prime Minister Recep Tayyip Erdoan met in St.Petersburg

YASU GLOBAL ADVISORS

www.yasuglobal.com

YASU GLOBAL ADVISORS

www.yasuglobal.com

Food Industry Outlook in Turkiye

Turkey is self-sufficient in most foods, although some agricultural commodities are imported. According to the EIU estimation, the total consumer spending on food, beverages and tobacco accounted US$ 145 billion in 2011, up only marginally from US$ 142 billion in 2010. Through the widespread presence of modern international and domestic grocery retail outlets as well as rising incomes, the consumption patterns of Turkish consumers have shifted away from bulk and raw foods towards packaged and processed foods, including ready-to-eat meals and frozen foods. Total household expenditure on food and non-alcoholic beverages accounts for around 26 percent of all expenditure. Major food consumption patterns have not changed as much in the rural areas and are still based on wheat and grain products and a variety of meat products (lamb and beef ). Milk consumption has not increased as quickly as milk production, although the variety of milk products such as yogurt and cheese has increased. The most consumed traditional foods are pekmez, pestil, cezerye, lokum, and baklava. Consumption of soft drinks is much higher than that of alcoholic drinks and is dominated by sales of bottled water. Turkey is ranked seventh globally in terms of tea cultivation, fifth in terms of dry tea production, and fourth in terms of annual per capita tea consumption. Packaged food sold from modern retail outlets only accounts for around 20 percent of all consumer spending on food. Demand for higher-value food products that take less time to prepare is expected to rise in urban areas. High-end market segments such as health and organic foods only have a niche presence in Turkey. The latest trends are to develop Halal food production (food permissible under Islamic law). The six top agricultural products in terms of value in Turkey were: Cows milk (ranked by commodity in the world 55), tomatoes, wheat (ranked 22), grapes (ranked 20), chicken meat (ranked 114), and olives (ranked 35).5 Crops that show potential for domestic production are nuts (pistachios, almonds and walnuts), figs, apricots, camels and sheeps milk and meat.

Agro-industry outlook and performance

Agro-industry background and challenges: Around 40 percent of Turkeys land area is arable. Turkeys agriculture offers a large range of products such as grains, pulses, oil seeds, fruits and vegetables, cut flowers, poultry, dairy products, honey and tobacco. Apart of agriculture, fisheries and seafood production is a large sector of the economy, contributing with 26 percent to GDP. Crop production and livestock together account for 67 percent of the total agricultural production. Agriculture has an important impact on the social and economic development of Turkey since it meets the majority of the populations food requirements domestically and prevents Turkey from being dependent on international sources. It also supplies the raw materials of other sectors dependent on agriculture. According to the UNIDO Industrial Development Report agriculture is of high importance in Turkey and agriculture is fragmented to a normal extent. A exercpt from a UN publication: Turkey experienced a continuation in its economic transformation from agriculture towards industry and the services sector. Currently, the main target of Turkish food and agricultural production is to harmonize the related activities and regulations with the EU acquis communitaire. The Turkish food sector is becoming more advanced due to retailer demands for higher standards and investments by food manufactures. The liberalization of the alcoholic drinks sector since 2003, after the privatization of the former state alcohol and tobacco monopoly, has encouraged new companies to enter the market. Turkeys packaged food industry is highly fragmented. Being a Muslim country, Turkey also has the potential to sustain growth from the Halal food industry. According to the World Halal Forum, the global Halal food industry is expected to reach US$ 650 billion in 2010

Agro-industry outlook and performance

Agro-industry background and challenges: Around 40 percent of Turkeys land area is arable. Turkeys agriculture offers a large range of products such as grains, pulses, oil seeds, fruits and vegetables, cut flowers, poultry, dairy products, honey and tobacco. Apart of agriculture, fisheries and seafood production is a large sector of the economy, contributing with 26 percent to GDP. Crop production and livestock together account for 67 percent of the total agricultural production. Agriculture has an important impact on the social and economic development of Turkey since it meets the majority of the populations food requirements domestically and prevents Turkey from being dependent on international sources. It also supplies the raw materials of other sectors dependent on agriculture. According to the UNIDO Industrial Development Report agriculture is of high importance in Turkey and agriculture is fragmented to a normal extent. Turkey experienced a continuation in its economic transformation from agriculture towards industry and the services sector. Currently, the main target of Turkish food and agricultural production is to harmonize the related activities and regulations with the EU acquis communitaire. The Turkish food sector is becoming more advanced due to retailer demands for higher standards and investments by food manufactures. The liberalization of the alcoholic drinks sector since 2003, after the privatization of the former state alcohol and tobacco monopoly, has encouraged new companies to enter the market. Turkeys packaged food industry is highly fragmented. Being a Muslim country, Turkey also has the potential to sustain growth from the Halal food industry. According to the World Halal Forum, the global Halal food industry is expected to reach US$ 650 billion in 2010