BMI View: In 2015, annual growth across Turkey's main ports is set to be healthy, with the port of Ambarli forecast to see year-on-year (y-o-y) tonnage growth of 7.30%, while box throughput at the port will come in at a lower rate of 6.44%. Meanwhile, the growth picture at the port of Haydarpasa will be equally impressive with tonnage forecast to increase by 8.22% y-o-y (the outperformer in 2015) and container throughput by 3.90% in 2015. The port of Izmir is not set to see similar levels of growth to Ambarli and Haydarpasa (2.25% and 2.30% in tonnage and box terms, respectively). The growth at Turkish ports is predicated on rising total trade growth in real terms this year (4.85%).
The trade picture in Turkey has some pertinent potential bright spots on the horizon, which should provide a shot in the arm to the country's shipping industry. Peru is currently negotiating free trade agreements (FTAs) with Turkey and Honduras, and is likely to subsequently start trade negotiations with India and Indonesia, according to Peruvian Minister of Foreign Trade and Tourism Magali Silva.
Meanwhile, Turkish President Recep Tayyip Erdogan's visit to Iran was ai med at boosting bilateral trade . Erdogan had previously stated that Ankara may consider providing logistical support to the Saudi-led military mission in Yemen. The remarks had caused uproar in Iran. During the visit, eight economic cooperation deals were signed between the two countries. In addition, Erdogan proposed eliminating the US dollar and the euro as the currency of commercial transactions, using national currencies instead, reported by Al-Monitor.
Headline Industry Data
2015 port of Ambarli tonnage throughput is forecast to grow 7.30% to 4.59mn tonnes; over the medium term to 2019, we project average annual growth of 6.74%.
2015 port of Ambarli container throughput is forecast to grow 6.44% to 3.90mn twenty-foo equivalent units (TEUs); over the medium term we project annual average growth of 6.33%.
2015 total trade growth forecast at 4.85%, up from an estimated 3.32% in 2014.
Key Industry Trends
Global Yatirim Decides Against IPO - Global Yatirim, the Turkish investment holding firm announced in May that it had decided not to go ahead with a public offering for the company's ports unit Global Liman. Shares fell 10% as news of the development became public knowledge. Previously, in January 2015, plans had been made to sell 37.66mn shares; however, the company is set to forge ahead with new port acquisitions as a private company.
Turkish, Arab Ministers Agree To Strengthen Economic Ties - At the conclusion of the second Turkey-Arab League meeting between economy, trade and investment ministers on April 20, representatives agreed to speed up the implementation of programmes focused on strengthening commercial exchanges and economic cooperation between Turkey and Arab League member states. This development could provide a boost to the Turkish shipping industry as trade grows as a result of the tie up.
Petlim Port To Open In September - Petlim container port is set to open in the fourth quarter of 2015. Kenan Yavuz, Turkey's CEO of SOCAR explained that the largest ships in the world will be able to dock in Petlim, which will be the biggest port of the Aegean region, and the third largest in Turkey. The Petlim Container Port will be operated by Dutch company APM Terminals.
Risks To Outlook
Upside risk presents itself by the various trade agreements currently on the table. The Turkish government and the EU were scheduled to enter a memorandum of understanding on May 12 to renew the Customs Union agreement, according to Turkish Economy Minister Nihat Zeybekci. The agreement, which will be signed in Brussels, Belgium, includes four favourable items for Turkey. In addition, the agreement renewal will eliminate all obstacles and tariffs that hamper the free flow of Turkish goods in the EU market within the range of the Customs Union agreement, providing a boost to the Turkish shipping industry going forward. And finally, the new agreement will include agriculture, the service sector and public procurement, which were all excluded in 1996.
Meanwhile, Russian Minister of Economic Development Alexei Ulyukaev has stated that there are no legal hurdles to conducting bilateral trade between Turkey and Russia in their own currencies. The minister noted that Russia could export gas to Turkey and make investments on the Turkish currency if such a mechanism was established between the two countries. Russia is currently suffering due to various sanctions that have been placed on the country and Turkey could be placed to benefit from increased trade with Russia as a result.