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US Sanctions on Iran hit Turkish apparel exports
29
Mar '12
The fresh wave of unilateral sanctions imposed by the US and EU on Iran is affecting apparel exports from Turkey, a member North Atlantic Treaty Organization.

Turkish exports to Iran surged 12-fold during the last ten years to touch US$ 3.5 billion in 2011 due to improved bilateral relations and growing trade between the two countries.

The new US sanctions targeting Iran's central bank, imposed in January this year, led to a decline in value of Iran's currency 'rial' by more than 50 percent against the dollar. As a result, the relative cost of Turkish items nearly doubled in a span of few days.

The effect was immediately visible and overall Turkish exports to Iran fell sharply by 25 percent in January 2012 from a month earlier.

Meanwhile, all Turkish banks except for the state-owned Halkbank have stopped processing payments for Iranian customers.

The net result is that Turkish apparel exporters, who expected their sales to grow during the days before the Persian New Year, are witnessing a slump and their stocks are getting piled up.

Speaking to fibre2fashion, Mr. Ali Ulvi Orhan, Head of Osmanbey Textiles Businessmen Association (OTIAD), which represents around 800 Turkish textile and apparel firms, said, “The Turkish textile and apparel industry got affected by the results of the sanctions immensely as significant volume of garment exports from Turkey to Iran has received an abrupt and unforeseen halt.”

“The ramifications of this chain of events has resulted in Turkish companies holding significant supplies of apparels that they had produced, but could not sell, in anticipation of a growth between Turkish and Iranian trade,” he explains.

Suggesting a solution to ease the situation, he opines, “A long lasting solution seems improbable due to sustained heat in the political arena between Iran and the West. But a temporary solution between Turkey and Iran could be to use a bartering system between the two countries.”

Fibre2fashion News Desk - India

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