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Cablegate: Eu to Inspect Turkish Poultry Plants for Export

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 ANKARA 006070

SIPDIS


SENSITIVE


STATE FOR EUR/SE, EB/EPD, AND EB/TPP/ABT
DEPT PLEASE PASS USTR FOR NOVELLI, LERRION
USDA FOR FAS FOR ITP/MEYER, HANSEN;
CMP FOR ALL COMMODITY DIVISIONS
USDOC FOR DEFALCO


E.O. 12958: N/A
TAGS: ETRD EAGR KPAO TU USTR
SUBJECT: EU to Inspect Turkish Poultry Plants for Export

Sensitive but Unclassified. Not for Internet Distribution.


1. (SBU) Summary. Five Turkish poultry facilities are being
inspected by the EU veterinarians for approval to export
poultry meat to the European Union. Turkish officials
estimate that, during the first year, exports for the five
plants could total up to 10,000 tons. An additional 4
plants will be inspected by next March. Turkish officials
are hoping that this could eventually lead to additional
exports to other markets including Russia and the Middle
East. While the Turkish exports could compete with U.S.
poultry in other markets, Turkey's need for U.S. soybeans
and corn could increase. It is not clear whether the
European Union will require Turkey to relax its import
requirements on EU food products in return for this
approval. End Summary.


--------------
EU Inspections
--------------
2. (SBU) In March, Turkish officials indicated that the EU
would begin inspection of several poultry facilities for
approval to export poultry meat to the European Union.
According to Turkish poultry representatives, EU
veterinarians are currently in Turkey inspecting 5
facilities. An additional 4 facilities applied to the
Ministry of Agriculture and Rural Affairs but have been
asked to wait until March 2004.
The 5 facilities now being inspected are some of the largest
and most modern facilities in Turkey.


3. (SBU) MARA officials have agreed to allocate and assign
35 veterinarians to the facilities. The veterinarians who
will be located on the premises will be responsible for
overall quality control and record keeping as required by
the European Union. Note. In the past, the Ministry
refused to allocate any personnel for this duty claiming
that it needed to reduce personnel. End note.


-----------------------
One Million Ton Capacity
-----------------------
4. (SBU) Poultry officials estimate that during the first
year 10,000 tons of poultry meat could be sold to Europe.
This amount could climb much higher in future years. Turkey
produces approximately 680 TMT of poultry meat a year but
has the capacity to produce 1 million tons.


5. (SBU) Turkish business representatives believe that EU
approval could raise the image of Turkish poultry products
and encourage other countries to buy from Turkey. Turkey
exports some products to both Russia and the Middle East but
believe they could expand these markets considerably.
The expanded export market could also serve as a safety
valve for the Turkish poultry sector. In the 1990s, poultry
production increased considerably, which in turn led to
overproduction, falling prices and many bankruptcies. A
larger export market could alleviate this cycle.


---------------------------
Turkey's Economic Advantage
---------------------------
6. (SBU) Turkish exports to the EU would compete directly
with Thai, Brazilian and Polish exports of poultry meat.
Turkey's facilities are very modern and the cost of
shipments would be much lower than either Brazil or
Thailand. For the United States, poultry producers could
face stiffer competition in Russia and Middle Eastern
markets particularly given this transportation advantage.


-------------------------------
Good News for Corn and Soybeans
-------------------------------
7. (SBU) On the other hand, the Turkey currently cannot
produce enough feed ingredients (soy and corn) to supply its
poultry sector. Turkey has imported approximately 1 million
tons of corn and a similar quantity of soybeans and meal to
meet the needs of its feed sector. The United States
supplied over half of both Turkey's soy and corn. As a
result, production increases could result in much higher
U.S. sales of both those products to Turkey.


----------------------
Comment: A Good Start?
----------------------
8. (SBU) Turkey has been pressing the European Union for
greater access for its agriculture products. Several of the
plants currently being inspected had previously received
good ratings from the Europeans. It is not clear whether
the EU will demand similar approvals for exporting EU food
products to Turkey. In the past, EU officials have
expressed their frustration with Turkey in negotiating
market access.


9. (SBU) The willingness of MARA officials to assign
veterinarians to the plants is also a good sign. MARA is
not known for having a progressive relationship with its
industry counterparts. It should be noted that on the day
the inspections were announced, Turkey also increased its
duty on corn imports to 70% which will, of course, increase
the production costs for poultry producers and could in the
end make them less competitive.


Edelman

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