Turkey's apparel exports began sharply rebounding in May, after the new lira sharply fell against the euro and the US dollar. Lower currency value should help Turkish exporters is regaining market shares that were lost in the first quarter this year on the EU's clothing market.

As indicated by our statistical report below, Turkey is increasingly shifting to more expensive products, probably improving the quality of its exports in order to limit the current surge in low-cost competition from Asia.

A major supplier of woven men suits (HS 6203) on the European market, for instance, Turkey saw its share however declining from 13.60 percent down to 12.93 percent in volume terms.

Although unit values rose 5.71 percent in the first quarter, imports finally fell in value terms with shares also decreasing in value terms.

For a large number of clothing categories, Turkish exporters lost market shares in volume terms but also in value terms.

Turkey's share of EU's import market for woven M/B shirts (HS 6205) fell from 12.16 percent in first quarter last year to only 10.73 percent this year.

Not surprisingly, Turkish prices are far above the average level of prices from outside the European Union.

In 6205, prices are nearly double the average level for all suppliers.

T-shirt prices were lowered this hear, however, with Turkish unit values "only" 44 percent higher in the first quarter, after being 78 percent more expensive in the same period last year.

The recent fall in the lira may have sharply improved Turkey's competitiveness on EU's market, as reflected by a jump of 11.61 percent in total apparel exports in US$ terms in May, from the same month last year.

By contrast, exports had declined 6.55 percent in the first four months of 2006.

Turkey is not fully protected by EU's quotas on imports from China that mostly benefit India. The fall in the lira should however give more time to adapt to Turkish exporters to further adapt to the new post-quota world.