‘Double exchange rate’ request from exporters – Last Minute Economy News

Kazım Taycı, President of Istanbul Cereals, Pulses, Oilseeds and Products Exporters’ Association (IHBİR), stated that as exporters, they have serious concerns about pricing and competition; He demanded that “double exchange rate” be applied to exporters.

Taycı also emphasized that they understand and support the economic management’s efforts to fight inflation.

Taycı said that exporters want the exchange rate to be at least 40 in the exchange of foreign currency revenues, as opposed to the dollar-TL exchange rate, which is currently traded at close to 32 levels.

Speaking at the meeting where İHBİR’s 2024 targets and the latest situation in exports were evaluated, Taycı said, “Like all exporters, we, food exporters, are currently suffering from the exchange rate. The reason is that the current exchange rate is far behind inflation. When we price in this way, we automatically increase our prices in foreign currency.” “So when we increase our 10 dollar product to 11.5-12 dollars, we cannot explain to the customer why we increased the price in foreign currency,” he said and added:

“We demanded 2 percent regarding the exchange rate, we said 4 percent, we said 10 percent. But now we are at a point where we cannot tie this issue with percentages. If possible, a ‘double exchange rate’ application should be implemented. As IHBİR, we export to 160 countries. We have been in these markets with many years of struggle. “We found a place on the shelves. If we fall off the shelves here due to the exchange rate, we will have to fight much harder to get back to these shelves.”

In current practice, exporters are required to sell 40 percent of their export revenues to the CBRT. When exporting companies sell the foreign currency they bring from abroad to the Central Bank, they receive foreign exchange support of 2 percent of the amount converted into TL. However, exporters argued that this level of support was not sufficient and demanded that this rate be increased first to 4 percent and then to 10 percent.

Stating that even these rates will not be sufficient at the moment due to the gap between inflation and exchange rate, Taycı said that the exchange rate that should be applied to the exporter should be at least 40 lira.

“Of course we understand and support the fight against inflation,” Taycı said, and on the other hand, he said that a “double exchange rate” application should be introduced in order for exporters not to be disconnected from production and not to lose their markets abroad.

“WE NEED 40 TL URGENTLY”

Taycı said, “We support the policies implemented by the government, that is, the authority, in the fight against inflation. Therefore, we are aware that the increase in exchange rates will seriously negatively affect inflation” and added:

“For this reason, we say that after the producer-exporter submits his declaration and the money is transferred to the bank, a double exchange rate should be applied when converting it. We demand that a rate be determined in meetings with the Central Bank at regular intervals in a way that can meet the needs of the exporter, and that (export income) be exchanged over this by updating method. “Because even percentages are out of the question now. We said 4 percent, then we said 10 percent. The rate remains at 2, it does not solve any of our needs. We need 40 TL very urgently.”

According to the information given at the meeting, the exports of İHBİR members are expected to be 4 billion dollars in 2024, and the total exports of the sector are expected to be 14 billion dollars.

Inflation rose to 68.5 percent annually in March. TL lost approximately 9 percent of its value against the dollar in the first quarter of this year.

PRICES OF CONFECTIONERY INCREASED BY 80 PERCENT

At the meeting, Taycı also evaluated the price developments in confectionery and chocolate products, which are within the scope of activity of İHBİR, before the Eid al-Fitr and said, “The prices in confectionery increased by 80 percent compared to last year’s holiday period. The increase in the inflation rate is already reflected in the figures.”

However, Taycı stated that confectionery products will still be more attractive than chocolate due to the decrease in the yield of cocoa, the raw material of chocolate, and the resulting price increases, and said, “The price of cocoa butter has increased to 30,000-32,000 euros per ton. The cost increase has not yet been reflected in the products. It will be reflected in the prices after the Eid. After the Eid al-Fitr.” “Chocolate will be a difficult product to reach due to its price,” he said.

Taycı stated that due to the increase in cocoa prices, both producers and consumers will be looking for alternatives and said, “Rather than solid chocolate, chocolate coated products will be preferred.”