Background
The Horeca sector in Turkey thriving and has been growing rapidly in recent years. Turkey is one of the world’s most popular tourist destinations and is known for its rich history, diverse culture, and exquisite cuisine. The country attracts millions of visitors every year and, and Horeca sector across the country benefit from this influx of tourists.
The Horeca sector is also called out of home food sector and use of palm based industrial fats has become new growth area for the Turkish oils & fats industry since 2010. Growing tourist arrvivals surpassing 51 million in 2022 and increasing numbers of restaurants , shopping malls , and cafe supports the consumption of palm based oils and fats consumptions.
Turkey Oils & Fats Scenario
Turkey’s Total Oils and Fats Balance (000 Tonnes)
| 2017 | 2018 | 2019 | 2020 | 2021 | |
|---|---|---|---|---|---|
| Production | 1.912 | 2.059 | 2.118 | 2.236 | 1.997 |
| Total İmports | 1.422 | 1.350 | 1.445 | 1.690 | 1.760 |
| Total Exports | 666 | 651 | 711 | 966 | 922 |
| Consumptions | 2.770 | 2.794 | 2.825 | 2.836 | 2.762 |
| Caput Use (kgs) | 30.3 | 30.0 | 29.7 | 29.6 | 30.4 |
Source: Oilworld
Turkish vegetable oil market is the fastest growing market in the world. It is the world’s 6th largest importer country of oils and oilseeds. Turkey’s palm oil imports have been increasing steadily from 2017 to 2021. Turkey imported about 1.7 million tonnes of oils and fats in 2021 and palm oil import constituted about 50 % of total oils and fats imports. Turkey also exports oils and fats to neighbouring countries like Azerbaijan, Georgia, Iraq and Syria. The country exported about 922.000 MT of oils and fats in 2021.
Palm oil is the largest consumed edible oil in Turkey after sunflower oil and accounted for 52% of the total consumption in 2021. Imports of palm oil into Turkey in 2021 came from Malaysia (92%), Indonesia (8%).
In the past five years, the per capita consumption of oils and fats in Turkey has been in the range of 29.00 kg to 30.00 kg, which is lower than the global average of 31.47 kg in 2021, which means that the country’s oils and fats market has a great expansion potential.
Oppurtunities in HORECA
Turkish government has launched new economic model in December 2021. The new economic model that the government has started implementing will help Turkey become one of the world’s top 10 economies. Turkey is transitioning to a new economy model that will carry Türkiye to the future based on four pillars: investment, production, employment, and exports. Due to the constant increase in cost in the hospitality sector, surge in energy, agriculture and food prices, as well as the rise in inflation and the rapid devaluation of the Turkish lira, Turkey now focus on tourism to close the current account deficit.
Tourism is one of Turkey’s most dynamic and fastest growing economic sectors. In 2022, it directly accounted for 9.7% of total employment, directly employing 2.8 million people. Total tourism income represented 4.8% of GDP.
| YEARS | NUMBER OF TOURİSTS | TOURISM INCOME ( 1000 $ ) |
|---|---|---|
| 2018 | 46 112 592 | 30 545 924 |
| 2019 | 51 747 199 | 38 930 474 |
| 2020 | 15 971 201 | 14 817 273 |
| 2021 | 30 038 961 | 30 173 587 |
| 2022 | 51 387 513 | 46 477 871 |
Source: TUIK
Number of tourist arrivals reached before the Covid- 19 pandemic level. 51 million tourist visited Turkey and tourism income reached to USD 46 billion in 2022. The tourism industry targets 60 million tourist arrivals to Turkey and 56 billion USD income from tourism sector in 2023.
Turkey’s growing food and service market is currently gaining momentum as one of the largest in the Europe and Middle East, valued at USD 54.6 billion in 2021. And according to Turkish statistcs, it is projected to grow at a CAGR of 7.91% during the forecast period of 2023-2027. The HORECA in Turkey is projected to continue to prosper in the future. The drivers of this growth are:
- Demographics: A young population as 56% of the Turkey population are between the ages of 15-45. Most of them are affluent and are the main consumers in these sectors.
- Expansion of the Tourism and Entertainment Industries: Main catalyst for the expansion of HORECA industries in Turkey, boosting the demand for food outlets and hotels in the country.
Conclusion
Turkey is the 6th largest importer MPO importer overall and also the biggest importer of MPO in the region. Malaysian palm export to Turkey will continue increase driven by the Horeca and food sectors which will see more palm oil to be imported by Turkey.
Due to the constant increase in cost in the hospitality sector, surge in energy, agriculture and food prices, as well as the rise in inflation and the rapid devaluation of the Turkish lira, Turkey will now focus on tourism to close the current account deficit. The tourism sector targets 60 million tourist arrivals to Turkey in 2023.
The current Malaysia-Turkey FTA gives another advantage to the export of Malaysian palm oil into the country by having a lower import tax compared to other palm oil-producing countries.
Prepared by: Hakan Alkan
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