Background
The HORECA (hotels, restaurants and cafes) sector of Turkey is currently 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 its HORECA sector has benefited from this influx of tourists.
The HORECA sector is also called out-of-home food sector and its use of palm based industrial fats has become a new growth area for the Turkish oils and fats industry since 2010. Growing tourist arrvivals surpassed 51 million in 2022 and the increasing numbers of restaurants, shopping malls, and cafes support the consumption of palm-based oils and fats.
Turkey Oils and 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 Imports | 1,422 | 1,350 | 1,445 | 1,690 | 1,760 |
| Total Exports | 666 | 651 | 711 | 966 | 922 |
| Consumption | 2,770 | 2,794 | 2,825 | 2,836 | 2,762 |
| Caput Use (kg) | 30.3 | 30.0 | 29.7 | 29.6 | 30.4 |
Source: Oilworld
The 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, with Turkey’s palm oil imports 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 such Azerbaijan, Georgia, Iraq, and Syria, and the country’s oils and fats exports came to about 922,000 MT 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
The Turkish government has launched a new economic model in December 2021, with the objective of moving Turkey into the world’s top 10 economies. This is based on four pillars: investment, production, employment, and exports. Due to the constant cost increases 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 focuses 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 the total employment, directly employing 2.8 million people. The total tourism income represented 4.8% of the country’s GDP.
| YEAR | NUMBER OF TOURISTS |
TOURISM INCOME (USD1,000) |
|---|---|---|
| 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
In 2022, the number of tourist arrivals reached the figures recorded before the Covid-19 pandemic. 51 million tourists visited Turkey and tourism income reached USD46 billion. The tourism industry targets 60 million tourist arrivals to Turkey and USD56 billion in income for 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 USD54.6 billion in 2021. And according to Turkish statistics, it is projected to grow at a CAGR of 7.91% during the forecast period of 2023-2027. Turkey’s HORECA sector is projected to continue to prosper in the future. The drivers of this growth are:
- Demographics: A young population as 56% of the Turkish population is 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: It is the main catalyst for the expansion of the HORECA industries in Turkey, boosting the demand for food outlets and hotels in the country.
Conclusion
Turkey is the 6th largest MPO importer overall and also the biggest importer of MPO in the region. Malaysian palm export to Turkey will continue to increase driven by the HORECA and food sectors, which will see more palm oil 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 has provided another advantage to the export of Malaysian palm oil to the country, by subjecting the commodity to a lower import tax as compared to palm oil from other countries.
Prepared by: Hakan Alkan
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