Turkish exporters, tourism sector cut prices(Al Monitor, Nov.17,2022)

Turkish officials have been hailing a notable rise in the country’s exports, but the increase has been marked by price cutting while the country’s imports have grown more expensive, official data show.

In the first nine months of the year, Turkey’s exports were worth some $188 billion, a 17% increase from the same period in 2021, while the bill of its imports topped $271 billion, increasing more than 40% from the same period last year.

Trade Minister Mehmet Mus praised the rise in exports as “a strong performance,” but said nothing about how the quantity of exports has changed.

The increase in export revenues was achieved by selling larger quantities of products and thus with lower export unit prices, foreign trade indices released by the Turkish Statistical Institute (TUIK) this week show. The export unit value dropped to 71% of the import unit value in September, according to the data. The export and import unit values were at par in August 2020. In other words, while Turkish exporters sold goods at lower prices, the country’s imports, chief among them energy, grew more expensive, resulting in a significant shift of resources overseas or a “capital hemorrhage” via foreign trade.

The change in the purchasing power of exports relative to imports is measured by the terms of trade (TOT) indicator. The TOT index is the ratio of the export unit value index to the import unit value index. A TOT index above 100 denotes a favorable outlook for the exporting country, with goods sold at higher prices and bought at lower prices compared to the base period, and vice versa, the TUIK says.

https://www.al-monitor.com/originals/2022/11/decline-turkish-lira-forces-exporters-cut-prices-boosts-tourism