The export of French fries and other potato products from Turkey to Russia has increased almost tenfold since the war in Ukraine. Turkey has not only acted as a negotiator in the grain deals, but has also become an important supplier of French fries. Is the country secretly also a back door for European manufacturers?
In the first half of 2023, Turkish chip exports slowed down, while a record volume of fries was exported in the second half of 2022. Now that President Recep Tayyip Erdogan is firmly in power again, the export of potato products is also increasing again. There may not be a direct causal link between the two facts, but the country could certainly use an economic windfall. Russia has become an important customer since the war with Ukraine. For Erdogan it is an opportunity to gain economic stability in his country.
Chip exports tripled
In June this year, Turkey exported more than 5.000 tons of fries and other frozen potato products, according to data from the Harmonized Trade System. That is almost a threefold increase compared to last year. In the five months before that, exports were remarkably quiet. According to insiders, because the Turkish government does not want to appear too pro-Russia. That country is the major driving force behind Turkish exports.
80% of the fries exported in June were destined for Russia and this is not the first time. Over a period of twelve months, the Russians purchased more than 60.000 tons of fries, compared to almost zero in 2020/21. Even though products such as fries and other potato snacks are not on the West's sanctions list, it is very difficult for Russia to import them. The lines across the Black Sea with Turkey are short and both countries now benefit from this. Russia is even the only significant trading partner for French fries in Turkey.
Inflation
Turkey is struggling with sky-high inflation and is doing everything it can to stabilize it. That worked for eight months in a row, even though it was running inflation rate in July it rose again to 47,8%. At the same time, the lira has a lot of its value verloren, which is beneficial for countries that buy Turkish goods. An ever-rising interest rate should curb inflation. This policy is at odds with what President Erdogan has been doing for years, and which has plunged the country into recession.
Other buyers of Turkish fries are Iraq, China and Syria, although the volumes to those destinations contrast sharply with Russia's figure. Only Iraq can be called a large party in that respect – with around 12.500 tons of fries annually. Total exports doubled in the second half of last year compared to 2021. Despite the fact that the first half of this year was very different, the financial profits continue to pile up. Significantly more expensive fries have ensured that the value in euros has tripled. This summer, the value of a ton of frozen fries is still increasing.
Export ban
It is striking that Turkey has significantly more fries available for export. The country has several national players that produce fries. According to the East-Fruit website, the cultivation of French fries potatoes is increasing considerably again this year. Late last year forbade the Turkish government is banning the export of consumption potatoes (and onions) due to the ever-increasing potato prices on the domestic market. Remarkably, this would now have caused prices to rise further, encouraging expansion of the acreage.
Turkey is one of the largest table potato exporters and mainly supplies potatoes to Asian (neighboring) countries. In 2021 this amounted to 265.000 tons. After the ban, this fell to 13.000 tonnes in the first quarter, compared to 113.000 tonnes a year earlier.
Turkish potato growers - who can grow potatoes almost all year round in growing areas throughout the country - are now focusing more on industrial processing. The import of Dutch seed potatoes rose this year to an absolute record of 23.343 tons. An increase of 95% compared to last year. This underlines the ambition to expand the area. In recent years, that area amounted to approximately 145.000 hectares, of which 4,5 million tons of potatoes are harvested. It is the fifth largest crop after wheat and corn, among others.
Turkey as a back door?
According to some insiders that Boerenbusiness There is more to the success story of Turkish chip exports. European potato processors would also contribute to the high export figures by exporting their product to Russia via Turkey. The European export figures can neither confirm nor deny that picture. As of this year, no export volume has been registered from the EU to the country. There was also no noticeable movement visible in the second half of last year. Just under 500 tons were exported in November alone, compared to normally between 50 and 150 tons. Even if Turkey is used as Russia's backdoor, it will be either on a modest scale or under the radar of international trading systems.