Textile and leather goods manufacturers in Istanbul’s garment district are feeling the fallout from the Russia-Ukraine conflict as Russian and Ukrainian customers canceled $200 million in orders in the past week, officials said. .
Trade losses have intensified pressure on Turkey’s economy. Officials estimate that if the Russia-Ukraine conflict continues, the textile industry alone will have more than $1 billion in direct risks.
Mustafa Senocak, head of the Istanbul Leather and Leather Products Exporters Association, said that orders for “hundreds of thousands of pairs of shoes and thousands of leather jackets” have been cancelled.
“Some Russian merchants told them that they wanted to pay using the previous ruble exchange rate, otherwise they would not be able to pay.” He said.
Officials said that Russian and Ukrainian exports of leather shoes, jackets and finished and semi-finished clothing to Turkey last year accounted for more than $1 billion, almost centered on Istanbul 3 times the unofficial “Suitcase Trade”.
Industry leaders said that due to uncertainty, Turkey’s trade with Belarus, Moldova, and Romania has also cooled down. Some Polish customers asked to suspend orders, and some Russian merchants asked for payment at the exchange rate before the collapse of the ruble.
Turkish President Erdogan has proposed an unorthodox economic plan aimed at stabilizing the lira currency by balancing the current account deficit. However, in view of the conflict between Russia and Ukraine, Goldman Sachs raised its deficit forecast this year from 1.5% to 2.5% of GDP.
