Turkish textile industry suffers as customers in Ukraine and Russia cancel orders

The loss of trade adds to strains on Turkey's economy, with officials estimating that more than $1 billion is directly at risk to the textile industry alone if the conflict in Ukraine continues.

Mustafa Senocak, head of the Istanbul Leather and Leather Products Exporters Association, said orders for "hundreds of thousands of pairs of shoes and thousands of leather jackets" have been cancelled.

"Some Russians say they can pay with the former rouble exchange rate. Otherwise they can't make payments," he said.

Russia and Ukraine accounted for more than $1 billion in Turkish exports of leather shoes, jackets and finished and unfinished clothing last year, and nearly three times that much in the unofficial "suitcase trade" centred in Istanbul, officials say.

Turkish trade with Belarus, Moldova and Romania has also cooled due to uncertainty, industry heads told Reuters. Some Polish customers asked to suspend orders, while some Russians asked to make payments based on foreign-exchange rates prior to the invasion and the collapse of the rouble.

Turkish President Tayyip Erdogan's unorthodox economic plan aims to stabilise the lira currency by balancing the current account deficit. But given the Ukraine conflict, Goldman Sachs revised its forecast for this year's deficit from 1.5% of GDP to 2.5%.

Source: www.reuters.com