Competitiveness of Turkey's Organic Exports in the European Union Market

Turkey's exports of organically produced agricultural products have been rapidly growing particularly in response to increasing demand in the European Union countries. Common view and findings of the research on organic trade in Turkey confirms that European market is expanding. A lacking component of the existing research on Turkey's organic exports is that none of the studies focused on modeling the export market for organic products which would enable to make forecasts as well as to make analysis for policy implications. Another missing component of the stream of studies on trade of Turkish organic commodities is the lack of understanding of the present situation of the competitiveness of Turkish exports in the European Union market. The study therefore focuses on estimating an econometric export demand function for organic products and exploring the competitiveness and export performance of Turkish exports as well as understanding the components of export performance. An effort to estimate an econometric export demand model for Turkey's organic exports and revealing sources of export performance and competitiveness is what makes the present study a unique one. The project has three major objectives and thus seeks to produce three outputs: The first objective is to estimate an export demand model for Turkish organic products in the European Union market. It is therefore possible to estimate price and income elasticities of demand as well as to make projections. The second objective is to explore Turkey's export competitiveness in organic products in the European Union market. It order to fulfill this objective, we will estimate indices to measure Turkey's competitiveness. The third objective is to investigate export competitiveness and determine the components of export performance. Through constant market share analysis, we seek to determine the key factors underlying the growth or Turkey's organic exports. The study reveals that export demand for the Turkish organic products are growing and sensitive to price and income changes in target countries. Turkey has a clear comparative advantage against the rival EU countries in selected products. Competitiveness is particularly due to relative prices, thus does not indicate a sustainable competitiveness due to lack of added value in the export items