Russia-Ukraine conflict is impacting Turkish textile and leather manufacturing industry and, as per industry officials, the buyers in Moscow and Kyiv have cancelled orders worth US $ 200 million during the past week.
The loss of trade adds to strains, with officials estimating that more than US $ 1 billion is directly at risk to the textile industry alone if the conflict in Ukraine continues.
Mustafa Şenocak, Head of the Istanbul Leather and Leather Products Exporters Association, informed, “The 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 ruble exchange rate otherwise they can’t make payments.”
It’s worth noting here that Russia and Ukraine collectively accounted for more than US $ 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.
Of total values, textile and leather exports totalled US $ 718 million to Russia in 2021 and US $ 308 million to Ukraine, as per official data.
The decline in exports could add to the Turkish current account deficit, which is widening following Russia’s invasion of Ukraine last week due to soaring energy prices and an expected hit to tourism this year.
Not just Russia and Ukraine, Turkish trade with Belarus, Moldova and Romania has also been impacted due to uncertainty, as per Reuters.
The estimated US $3 billion ‘suitcase trade’ – in which small merchants from Russia, Ukraine and other former Soviet states buy goods in Istanbul, pack them in empty suitcases and resell them back home – has also taken a hit.
“We had already started manufacturing for the new season – but now we have all stopped,” said Gıyasettin Eyyüpkoca, head of the Association of Industrialists and Business People of Laleli, the Istanbul district at the centre of the suitcase trade.
Russians and Ukrainians drive half of Laleli’s annual trade volume, Eyyüpkoca said. “I have had the same Ukrainian trading partner for years and an open account with him. How can I now ask him to pay me money while he is struggling to stay alive?”
