Rotten Tomatoes: Turkish Farmers Suffer Putin's Wrath Over SyriaBy , , and
‘We cannot survive without the Russian market:’ crop broker
Trade ties seen held hostage for political leverage on Syria
Along a fertile stretch of the northeastern Mediterranean, row after row of once-plump tomatoes are rotting on the vine.
The fallout from the war in Syria is creeping further into Turkey, where the sanctions Vladimir Putin imposed after President Recep Tayyip Erdogan’s forces downed a Russian jet 16 months ago are pushing farmers toward ruin.
“We cannot survive without the Russian market,” said Munir Sen, the head of the association of fruit and vegetable brokers in Mersin, the southern city that hosts Turkey’s biggest seaport. “Wastage rates have never been this high.”
Erdogan’s efforts at rapprochement with Putin have led to the lifting of the most punishing of the penalties, on Turkey’s key tourism industry. But with the two leaders pursuing conflicting agendas in Syria, Putin is refusing to budge on the tomato ban, keeping a lid on a market that had accounted for 70 percent of all Turkish exports of the fruit. While some shipments are being redirected, the Russian hole, worth a quarter of a billion dollars a year, is just too big to fill.
Putin’s squeeze is adding to a surge in unemployment and a widening trade deficit, turning the plight of tomato growers and sellers into a campaign issue for Erdogan, who’s asking voters to grant him vast new powers in an April 16 referendum. Turkey is hitting back by effectively barring purchases of wheat from Russia, the world’s largest supplier. That’s a retaliation fraught with risks for a country that’s the world’s biggest flour exporter and one of the biggest per capita consumers of bread.
The tit-for-tat escalation is “unsustainable,” Turkish Agriculture Minister Faruk Celik said in an interview on March 29 in Istanbul, imploring Russia to negotiate a truce and avoid hurting producers and consumers in both countries.
“We need each other," Celik said.
But Turkey’s struggling farmers are being held hostage to an even bigger and vastly more damaging dispute -- the multinational proxy war in Syria.
While Putin has enlisted Erdogan’s backing for efforts to end the six-year conflict, which Russia joined in November 2015, the leaders remain deeply at odds over Turkey’s policy of pushing for the removal of Putin’s Syrian ally, Bashar al-Assad, and Moscow’s embrace of Kurdish forces Ankara considers terrorists.
Keeping some agricultural bans serves two purposes for Putin, according to Alexander Shumilin, head of the Middle East Conflicts Center in Moscow. It allows Russia to retain leverage over Erdogan while also helping the domestic businesses investing in food production to aid a Kremlin push for self-sufficiency.
The food feud began with great fanfare in Russia in January 2016, when state TV broadcast the ceremonial bulldozing of Turkish tomato stocks. With regulators in Moscow urging Russia to keep the ban for several years, investors including billionaire Vladimir Evtushenkov started to move into the industry.
“The argument here is that once the ban was enacted, significant investments were made in domestic tomato production, and in order to protect these investors, the ban should remain," said Wolfango Piccoli, co-president of political analysis company Teneo Intelligence in London. “My personal intuition is that the real reason is that Russia will continue to exert leverage over Turkey for political reasons."
On March 10, Erdogan expressed confidence on his way to Moscow that he’d be able to persuade Putin to lift all remaining sanctions. He returned almost empty-handed, with Russia removing only restrictions on a few vegetables that collectively had just a fraction of the sales tomatoes did.
“Russia raised restrictions on some products that totaled $19 million," Turkish Foreign Minister Mevlut Cavusoglu said in an interview in Antalya on April 6. “That’s the value of what’s exported by one little company."
Apparently stung by the rebuke, Erdogan moved to retaliate four days later, when the Turkish-backed opposition in Syria suddenly pulled out of multiparty peace talks that Russia had organized in Kazakhstan. Foreign Minister Sergei Lavrov, visibly angered, demanded an explanation from Ankara.
The backlash intensified with the decision in Turkey to strike Russia from the “permitted origins” list that grain brokers use to avoid punitive import duties. The prospect of being shut out of a key market set off alarm bells in Moscow. It also helped trigger the first decline in wheat prices for Black Sea loading since the end of last year.
Russia could sell most of the wheat that Turkey’s not taking to countries in Africa, according to a report by Kiev-based consultant UkrAgroConsult. But Russia has already been struggling to sell a record crop amid global oversupply, prompting forecasts that it could lose its title as the world’s largest exporter as soon as this year.
And its consumers are missing out.
“This food ban needs to go," said Anastassia Paloni, a 31-year-old translator in Moscow. “We have like no vegetables here in the winter, it’s ridiculous."
For its part, Turkey has increased imports of Baltic grain to fill the Russian gap, and booked shipments from places including Ukraine and Hungary, according to S&P Global Platts. But it’ll struggle to find the high-protein wheat it needs to re-export as flour, Volodymyr Slavinskyy, a trader at grain trading company Nibulon, said in an interview in Kiev on April 5.
“I don’t expect Turkish buyers to change their preferences, because they are buying this wheat not to cover some internal demand in Turkey, but to produce flour and export it," Slavinskyy said. “Quality still is an issue in this case."
Nonetheless, Turkey is taking a tough stance. On March 21, Economy Minister Nihat Zeybekci threatened to “cut to zero” $1.83 billion of annual Russian food sales to Turkey if all bans aren’t lifted.
His warning came a day after Syrian Kurdish fighters released a statement saying Russia had agreed to train them. Russia didn’t deny the claim, saying only that it has an army unit in Kurdish-held northwestern Syria to monitor a cease-fire.
“You can only push Erdogan so far,” said Alexei Malashenko, a Middle East expert at the Moscow Carnegie Center. “Pressure on Turkey can boomerang.”
The standoff shows no sign of easing, as Erdogan and Putin continue to back opposing sides in the Syrian war. After U.S. President Donald Trump ordered a strike on Syria last week in response to a chemical weapons attack blamed on Assad’s regime, Russia called the intervention a dangerous violation of international law. Turkey applauded the strike, and offered the U.S. any support it needed in Syria.
On Monday, Russia warned airlines that it could reimpose a ban on charter flights to Turkey, according to the nation’s Tourist Industry Union. The earlier travel ban imposed in 2015 devastated parts of Turkey’s tourism industry, with just 866,000 Russians visiting last year, down from 4.5 million in 2014.
Both Erdogan and Putin seem locked into positions they consider vital to national security, leaving no relief in sight for Turkey’s beleaguered tomato industry.
“Producers were really hopeful about this year, that ties with Russia would improve,” Sen, the broker in Mersin, said by phone. “Instead, here we are.”
To continue reading this article you must be a Bloomberg Professional Service Subscriber.
If you believe that you may have received this message in error please let us know.