Turkey's currency depreciates, inflation soars to nearly 80%

Turkey's currency depreciates, inflation soars to nearly 80% 

Affected by the conflict between Russia and Ukraine, global energy and raw material prices have soared, and many countries around the world have experienced inflation problems. The US inflation rate reached 9.1% and the UK inflation rate reached 9.4%, both hitting a 40-year high. Inflation in the European Union climbed to 8.6%, the highest on record, and other countries such as South Africa to Australia set new inflation records.

However, these figures pale in comparison to the current situation in Turkey. The country's inflation rate rose to 78.6 percent in June, a 24-year high, according to a report released by the Turkish Statistical Institute, which tracks the country's data. Inflation has increased the operating costs of enterprises and reduced the purchasing power of consumers. Affected by this, a large number of small and medium-sized enterprises in Turkey have declared bankruptcy in the first half of the year.

Consumer prices in Turkey rose 78.6% in June from a year earlier, driven by soaring food, beverage and transportation costs. According to data from the Turkish Statistical Institute, food prices have risen by 93.93% and transportation costs have risen by 123%.

At the same time, Turkey is also facing a devaluation of its currency. The Turkish currency has lost more than 20 percent of its value against the U.S. dollar since the beginning of the year, increasing import costs. According to data released by the Turkish Chamber of Commerce and Commodity Exchange Union (TOBB), in the first five months of this year, a total of 7,597 companies closed in Turkey, of which as many as 2,054 closed in May alone, an increase of 259.7% over the same period last year. Separately, the number of closed cooperatives and individual companies (OPCs) also increased in May, up 671.4% and 122.2% year-on-year, respectively.

It should be noted that, before the vessel arrives at the Turkish port, the freight forwarder needs to register the goods under the name of the consignee. Any changes in the future must obtain the written consent of the original consignee. The immediate result of such a provision is that title has passed to the consignee before the actual delivery of the goods, regardless of whether the consignee has fulfilled its obligations under the trade contract.

According to Turkish customs regulations, the importer should complete the delivery procedures within 45 days after the goods arrive at the port, otherwise the goods will be confiscated and auctioned. However, after the 45 days expire, the consignee (buyer) has two opportunities to apply for an extension, each for 30 days, and does not need to submit a reason for the extension. After that, the consignee still has an opportunity to apply for a 30-day extension to pick up the goods, but he needs to explain the reason for the extension to the customs. Therefore, with the cooperation of the consignee, the goods will usually not enter the auction process within 135 days after arriving at the port, but the costs of demurrage and storage during this period are unavoidable.

It is not impossible to arrange the return of the cargo. However, a very important Turkish customs policy is that if the goods are returned to the port, the written consent of the consignee is required and the "Notice of Refusal of Delivery" is presented. If the original importer refuses to accept the goods, when the goods are resold, the bill of lading must have the endorsement of the first consignee. In addition, for the goods that have been stranded in the port for a long time or have not been picked up, the customs will treat them as no owner and have the right to auction the goods. At this time, the original importer is the first buyer.

Shenzhen Xunlaitong specializes in shipping export from Shenzhen to Australia & New Zealand, Germany, Netherlands and more business

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