After coming out of nowhere and briefly overtaking China to become the fourth largest world poultry supplier, Turkish chicken meat exports have nosedived. Disease, terror attacks and trade protectionism have all done their part to write an abysmal chapter in this otherwise highly dynamic, fast growing protein line.

 

First, in February Iraqi, which buys half the country's exported broiler meat, briefly multiplied the import tariff on Turkish poultry meat from US$39/tonne to US$290/tonne for a couple of months before it was rescinded.

 

Just when the industry was recovering from this setback, it endured a succession of bird flu outbreaks throughout the second, its first since 2008. According to the World Organisaiton for Animal Health, from one small farm, H5N1 –the same strain that resulted in human outbreaks in Southeast Asia,  spread to poultry growers in the provinces of Kastamonu, Balikesir and Manisa in the west of the. 

 

Thereafter, Iraq, which usually buys 50% of Turkey's exported chicken, opted to ban all chicken imports from Turkey, rather than those from regions with outbreaks. Finally, in August, just as the outbreaks ended, a succession of terror attacks on vehicles transporting Turkish chicken to Iraq caused many truck drivers to resign.

 

According to Abdurrahman Çakar, the Sakarya province Chamber of Commerce regulatory chairman, "We saw dramatic decreases in Turkish poultry exports for several months due to several problems. Most of these problems were fortunately overcome, but now we sector faces difficulty in finding trucks to transport their products to Turkey's eastern neighbors due to the rise in terror attacks."

 

As a result, by the late third quarter, Turkish broiler customs reported that chicken exports to Iraq had fallen 80% and overall broiler meat shipments were down 50% from the same period in 2014. According to Turkish Poultry Products Promotion Group head Müjdat Sezer from US$203 million in 2010, Turkish broiler exports earned US$608 million in 2013 and the future had looked bright. Sezer states that, "Our exports were around $1 billion last year, but we may barely end this year at around $700 million in exports in optimistic expectations." At this point, many believe that they will fall to 300,000 tonnes. Earnings are projected to drop to below US$600 million near to levels last seen in 2012.

 

What makes this setback problematic is its timing. Turkey's broiler sector is now entering a distinct –and more challenging– third phase. In the late 1990s and early 2000s, the sector took off on fast rising domestic consumption. It doubled from 2000's 660 tonnes to 2010's 1.3 million tonnes.

 

Rising at a 7.2% annual rate for the first ten years after 2000, domestic consumption growth had decelerated but has still increased at a relatively healthy 4.1% annual rate in the five years since 2010. Over these fifteen years, per capita chicken consumption increased at an average 4.7% annual rate, from 10.5kg in 2000 to 21.5kg this year. Moreover, with Turkey's economic growth several times that of developed countries, there is no reason per capita consumption could not continue rising by 2% annually (and domestic consumption by 3.3%) annually for at least another two decades.

 

While that is respectable by the slow rates of mature economies, it is a much slower pace than the 7%+ growth in domestic consumption experienced prior to 2010. Fortunately, with domestic consumption decelerating, the turn of this decade saw exports take off. From less than 2% of output before 2005, exports accounted for 7.7% of production by 2010, then nearly tripled to account for 22% of broilers meat grown in 2014.

 

However, while both broiler meat consumption and exports grew quickly in chapter two of Turkish poultry's story, chapter three was supposed to see exports take over as the growth driver from decelerating consumption –except this year, exports have crashed and consumption is rising by a very anemic 2%.

 

Going forward, a world economic slowdown is putting the brakes on Turkey's economic growth, and will probably limit domestic consumption to a 2% rise in 2016, for a second year in a row, though growth should recover to 3% or higher later this decade.

 

The situation with exports however, is far more uncertain. Unlike bird flu or tarrifs, terror attacks cannot be controlled via quarantines or political negotiation. The fact that an odd succession of random events derailed exports just in time for the domestic broiler demand to grow at its slowest pace in nearly fifteen years makes matters even worse.

 

With domestic demand growth slowing, export-driven growth is needed now more than ever before. With most exports committed to terror-prone overland destinations such as Iraq ,Uzbekistan, and Iran, industry leaders are seeking new export outlets such as Israel. All this makes for a very volatile situation; and makes the 360,000 tonne export prediction for 2016 rather meaningless.

 

 --On one hand, the terror attacks could suddenly disappear, bird flu never comes back and no unexpected import barriers are erected. That could cause exports to rise back to over 400,000 tonnes or higher. On the other hand, bird flu outbreaks could get worse during winter months and the terror attacks worse.

 

It is unusual to say that a country's export performance could vary by a factor of two, but that is how uncertain the Turkish broiler sector's export prospects are at this time. It is a good broiler sector trapped in a bad neighbourhood.