Turkish Trade Policy and the Efficiency of Turkish Cotton Markets

Turkey is one of the major cotton producers in the world. From 1987/88 through 1997/98, Turkey produced an average of 656,000 metric tonnes (MT) of cotton lint per year. It also exports a significant quantity of cotton lint and imports a significant quantity as well. For example, Turkish processors purchased an average of 766,000 MT of cotton lint per year from 1990/91 through 1996/97. Over that same period, Turkey imported an average of 133,000 MT per year, but also exported 70,000 MT per year. Turkish cotton markets can be divided into two distinct markets; the Aegean market and the non-Aegean market. Aegean cotton is typically considered to be one of the highest quality products in the world. As such, there is a demand for Aegean cotton in the rest of the world. Non-Aegean cotton is of lower quality, and because Turkish production is lower than its processing capacity, Turkey imports non-Aegean cotton from the rest of the world. Aegean and non-Aegean cotton are not considered substitutes by Turkish processors because Aegean cotton is roller-ginned while most non-Aegean cotton is saw-ginned. Turkish cotton trade policy is characterized by a combination of export taxes and import duties. In addition, TARIS, ANTBIRLIK, and CUKOBIRLIK are three agricultura