Ceylan Figen Rahmiye Federation and Turkey efficient in wheat and mandarin trade?

. The purpose of the study was intended to understand whether the Russian Federation and Turkey are efficient in wheat and mandarin trade in comparison with other significant exporters. The neighbourhood is an important aspect for developing and maintaining trade contacts. Within this perspective, the Russian Federation has been the main purchaser of Turkish fruits and vegetables. On the other hand, one of the major export products of Russia sold to Turkey is wheat in addition to energy and industrial inputs. Well knowing the importance of these product groups to both countries, it was intended to evaluate these countries rivalry in export markets concerning for their competitive countries. Authors used methods that allow to directly or indirectly assessing the degree of export competitiveness of the state: methods of comparative advantage analysis (RCA) and comparative export indicators (CEP). Wheat export of Russia and mandarin export of Turkey were compared with competitive exporters via calculation and interpretation of trade indices from 2000 to 2019. The findings indicated that Russian exports are superior to their competitors when some years were set apart. The specific overriding country has been Kazakhstan for Russian wheat, even if the productive capacities cannot be compared. Besides, Turkey ranks second after Spain for mandarin exports due to the comparative advantages. However, assessment of the findings in details indicated that there is a need to develop supporting policy and tools for two cases to increase the profitability and efficiency of the export. This is due to lower per-unit export gains and should be intervened to improve and strengthen the countries’ trade positions.


Introduction
Agricultural production is vital for any country to maintain livelihoods [4; 5; 10; 12]. However, it is not possible to produce all sorts of products for all countries due to lack of endowments [3]. Once the reasoning of wars and the intention to conquer new lands was meeting the nutrition demand of societies. After many millennia full of wars, trade had eased off the product exchange and achieving self-sufficiency. Therefore, the unmet agricultural demand of societies had brought agricultural and food trade into agenda a long time ago. Concerning trade of agricultural and food products, the proximity of destinations remained its importance. Therefore, neighbourhood relations have been important for perishable and durable agricultural trade. Accordingly, missing endowments are met from the closest possible place and this signifies the trade relationships between the Russian Federation and Turkey. Two countries exchange products specific to their productive capacities and requirements. While Turkey is a main fresh fruits and vegetable supplier for the Russian Federation, the country receives grains, mainly wheat, in return.
Around 35 % of Turkish exports to Russia encompass fresh fruits and vegetables (FFVs) sales and these FFVs sales to Russia constitutes 31 % of total agricultural exports of Turkey [2]. Among FFVs, citrus fruits, especially mandarin, ranks first followed by tomatoes that 55 % of Turkish mandarin exports was to the Russian Federation in 2017 [9]. According to the FAO data, Turkey ranked third in mandarin production after China and Spain with 1,65 million tonnes and 4,8 % contribution in 2018. It is important to note that China supplied 55,5 % of world mandarins then. Yet, respecting Turkey's stance in terms of exports, the country ranks after Spain and is being considered as a major mandarin exporter with a 14 % contribution to the world in 2017 [1].
In contrast, Turkey initially purchases energy and industrial raw materials from Russia and wheat imports rank the first among agricultural products sold to Turkey [8]. Turkey is one of the major grain producers and has sufficiency to some extent. However, exporting high-quality grains to The importance of these countries to each other can be understood from these data. However, what about their position as being the major providers in the world? Or in other words, are they, efficient exporters, when they are compared with other main exporters? Accordingly, within this paper, it was intended to understand whether the Russian Federation and Turkey are efficient in wheat and mandarin trade in comparison with other significant exporters. Revealed comparative advantages of the Russian Federation and Turkey were calculated and evaluated in this scope respecting their position in the last 20 years.

Material and methodology
In the paper, secondary data of trade retrieved from FAO and the UN COMTRADE statistical databases were used to evaluate the competitiveness of the Russian Federation and Turkey. The strong competitive countries demonstrated below were selected due to regional dispersion and taking the importer region in consideration rather than the volume of exports. National value of export converted in US Dollars was used to calculate two trade indices for indicating the competitiveness. In the analysis, Revealed Comparative Advantage (RCA) and Comparative Export Performance (CEP) indices were used accordingly. RCA index was developed by Balassa [6] and provides information on the rivalry of one country over other(s) respecting a pre-selected industry. CEP index on the other hand was developed recently by Serin and Civan [11] in order to ease interpretation of the supremacy of country. The indices refer to incorporation of comparative CEP index, on the other hand, was developed recently by Serin and Civan [11] to ease interpretation of the supremacy of the country. The indices refer to the incorporation of comparative export data, while there is one more applicable index named Revealed Competitiveness (RC) incorporating import data as well. Initially, it was designed to make the difference between export and import [13][14][15][16]. Yet, for the selected products, as there have been almost negligible imports, RC index was disregarded. The equation for RCA and CEP are as following:  Here the commodity j and belonging product group classified by the UN COMTRADE are as following. j = Wheat j = Mandarinsfresh or dried Product group = Cereals Product group = citrus fruitsfresh or dried CEP index, on the other hand, is the logarithmically normalised version of RCA index. RCA varies between 0 to +∞ and as higher is the index, as competition in the country i over country j. Besides, a value over '1' indicates the superiority of the country and a value between 0 and 1 means lack of exact competitive power. Yet, CEP taking value from -∞ to +∞ signs an absolute lack of competitiveness when the value is negative.
The indices were used for agricultural comparison in many studies before. In a recent study, analyses for Turkish grape and cherries markets were undertaken and the impacts of changing exchange rates over the indices were measured [7]. The RCA index indicated that Turkey has a significant advantage in grape export over China, France, Spain and the Netherlands. Yet, in cherries market, Turkey appeared as superior over Spain, Italy and the Netherlands when dominant Chile and US exports were excluded. Serin and Civan [7] compared Turkish exports of tomatoes, olive oil and fruit juices. Turkey appeared advantageous over its Mediterranean neighbours, Greece, Spain and Italy for olive oil and juices while there had been unexpected lower competitiveness for tomatoes.

Performance of Russian federation in wheat exports
Considering the changing export volume in tonnes and export revenue in US Dollars between years, Russian Federation overrides its competitors. Taking 2005 as a reference due to UN COMTRADE dataset, the wheat exports had risen from 10,4 million tonnes to 44 million tonnes indicating more than four-fold rise. Yet, the export revenue had risen by more than seven-fold from 1,1 to 7,4 billion Dollars. The closest competitors in terms of quantity exported were Germany with Yet, with reference to UN COMTRADE dataset, the other selected countries experienced appreciation as well. However, there were fluctuations observed within years for most competitors but Russian and Bulgarian supplies had risen throughout the period. Besides, Bulgaria seemed to supply four-fold of its 2005 production with 4,9 million tonnes and received more than seven-fold revenues with 950 million Dollars. Yet, these figures demonstrated the supremacy of Russian wheat exports.
However, the comparative situation concerning existing cereal export potential needed to be considered. The calculated RCA indices between competitors were demonstrated in figure 1.   It may not be possible to talk about Kazakhstani supremacy over the Russian Federation. To infer on this situation, it is essential to check the importing situation of the country. Due to UN COMTRADE data, Kazakhstan has been importing wheat as well. The country imported 62,4 million kg of wheat with 13 million Dollars, which rose to 337 million kg and 52 million Dollars. Yet, when the exports data for 2019 was revisited, it was understood that the country made 5 million tonnes of sales and received 1 billion dollars of revenue.  Therefore, positive wheat trade balance for Kazakhstan indicated proper utilisation of resources for wheat production and sales under given conditions. But for this inference, the position of Russia in terms of overall market power should be kept in mind. Following an assessment of Russian wheat, the commercial power of Turkey with regards to mandarin trade was evaluated.

Performance of turkey in mandarin exports
Turkey was compared with its Mediterranean competitors. Yet, prior to proceeding, it was considered essential to evaluate the changing situation of Turkey. By 2001, Turkey had exported 140 thousand tonnes of mandarins with the return of 49,2 million Dollars. The amount sold had risen by 4,74 times to 665 thousand tonnes but export revenue rose by 6 times to 297,7 million Dollars from 2000 to 2019due to UN COMTRADE dataset.
The closest competitor Spain used to export more than Turkey all the time, yet its exports had raised stably.

Figure 3. RCA index of Turkish mandarin exports over its competitors (source: UN COMTRADE) Рисунок 3. Индекс выявленного сравнительного преимущества (индекс RCA) турецкого экспорта мандаринов по сравнению с конкурентами (источник: База данных ООН по торговле «UN COMTRADE»)
The RCA index for Turkey and Spain ranging below 1 indicated the supremacy of Spain throughout the period, which is not surprising. The calculations showed that Turkey is specifically superior to South Africa and Greece. Yet, despite very few years, in which the index was so close to 1, Italy and Israel have been in lower positions as well. This situation was demonstrated with CEP index as in figure 4.

. CEP index of Turkish mandarin exports over its competitors (source: UN COMTRADE) Рисунок 4. Индекс сравнительных экспортных показателей (индекс CEP) турецких мандаринов по сравнению с конкурентами (источник: База данных ООН по торговле «UN COMTRADE»)
Due to CEP findings, Turkey was slightly disadvantageous against Italy with values ranging between -0,5 and 0 from 2009 to 2012 and Israel in 2015 and 2016. Yet, the findings indicated the second rank of Turkey. Here it is not essential to check import figures for these concerned countries. However, export revenue per unit sold should be considered to evaluate the position of Turkey. The prices had been fluctuating for all countries. Yet, the changing prices for all countries were checked. Table 1 indicates that Turkish superiority after Spain was not valid in terms of export revenues. While Turkish export prices were higher than that of Greek prices, the comparison set forward indicated higher profitability of other countries. Yet, Israel and South Africa seemed to appear as more profitable than Spain as well. As mentioned above, profitability of mandarin production and export should be considered within another perspective both for Turkey and for competing countries.

Results and discussion
Bilateral agricultural trade is inevitable for all countries due to varying needs and wants of the societies. Countries mostly prefer to execute trade relations within their neighbourhood. The import -1,00 -0,50 0,00 0,50 1,00 1,50 demand of countries is related to the lacking resource and agricultural outputs and internal demand for these lacking commodities. Due to their geographical proximity and historical bounds, Russian Federation and Turkey have strong trade relationships and these encompass agricultural and food products as well. With abundant agricultural production and trade capacity, Turkey mainly meets FFVs demand of Russian households. Yet, Russian producers have been meeting the gap for grains, specifically wheat in Turkish markets.
The main aim of this paper was to overview two countries' position with regards to their most powerful exportable agricultural products to each other. Turkey has been exporting mandarins and its varieties, while mostly imported Russian crop has been wheat. Departing from this information, it was aimed to measure the competitive power of these countries for wheat and mandarins concerning their significant competitors serving to same destinations.
It was understood from calculation and evaluation of wheat export data of the Russian Federation that the country has specific supremacy in the trade of this commodity in terms of quantity exported and export revenue. There had been some years that the Russian Federation had lost its power against its competitors relatively. However, the volume of exports is and will be promising for the country.
When mandarin exports of Turkey were visited, the data indicated that Turkey ranks the second after Spain, which was acknowledged through the literature as well. However, per unit earnings indicated earnings of Turkey have been relatively lower. Therefore, policy-making and implementation institutes should focus on supporting producers and trade dealers to increase return on exports. This could be achieved by developing product quality or providing incentives to manage costs.
After per unit export revenue for Turkey was overviewed, it was considered beneficial to check the situation Russian wheat exports. Being a major staple, no significant variation was observed for wheat exports actually. However, there has been a declination on per capita revenue for Russia since 2014 that 0,25 Dollars per kg of revenue had declined to 0,19 Dollars in 2018. The recent revenue per unit was lower than in Germany and Romania that received 0,21 and 0,23 Dollars in 2019. This change might be related to import sanctions issued against Russia and responsive actions taken by Russia after 2014 [2].
Yet, even under these circumstances, it can be noted that Russian farmers and trade dealers should be supported to some extent as well. Finally, the relative findings of this research indicated that there is a need for further investigation of export markets in Russia and Turkey. This could be achieved with in-depth surveys and analyses of the sector and stakeholders.

1.
It is considered the main positions of bilateral agricultural trade between Turkey and Russia from the perspective of understanding whether the Russian Federation and Turkey are efficient in wheat and mandarin trade in comparison with other significant exporters. In other words, in the scope of this paper, it was aimed to overview two countries' position with regards to their most powerful exportable agricultural products to each other.

2.
The authors point out that the neighbourhood is an important aspect for developing and maintaining trade contacts. Within this perspective, the Russian Federation has been the main purchaser of Turkish fruits and vegetables. On the other hand, one of the major export products of Russia sold to Turkey is wheat in addition to energy and industrial inputs. Well knowing the importance of these product groups to both countries, it was intended to evaluate these countries rivalry in export markets concerning for their competitive countries.