Turkish companies have started to feel the heat of Russian pressure that has mounted in light of a diplomatic crisis between the two countries, with a police raid on a carpet firm operating in Russia taking place on Wednesday, Turkish media reported on Thursday.
The carpet producer Merinos operates a factory in the Russian city of Rostov-on-Don, and was raided by armed, masked men claiming to be security forces, who seized computer hard disks, according to the report. “We were forced to stop production in the factory. Why they came to search us, I have no idea. Most of the factory workers are women and everyone was terrified. We had never seen or heard of anything like this until now,” said the firm’s Russian manager Svetlana Zimina, speaking to the Russian press. Merinos employs 450 Russians and has a number of Turkish employees in management, all of whom have the requisite documents and permission to work, according to Zimina. However, according to the company’s Russia general manager, Erdoğan Şeker, a court ordered for the deportation of 15 Turkish nationals employed by the firm in Russia. The employees were taken into custody at the immigration bureau, Şeker said.
Ever since Ankara shot down a Moscow jet near the Syrian border, diplomatic relations have soured between the two countries, and Vladimir Putin has signed a decree imposing a variety of economic sanctions against Turkey. Putin said on Thursday that Turkey will regret shooting down the plane “more than once.” A flurry of reports has circulated detailing difficulties faced by Turkish truckers who claim that they are being held up by Russian customs officials at the border, a practice that is costing Turkish fruit and vegetable brokers millions of lira each day. Moscow banned imports of some Turkish foodstuffs as part of a sanctions package. Despite the rhetoric, Russia’s retaliatory measures have so far been relatively limited in scope — affecting only some fruit and vegetable imports, for example. Turkey’s Agriculture Minister Faruk Çelik said on Wednesday that Russian sanctions will cost Turkey $764 million worth of food exports annually.
Turkey and Russia share extended economic ties across a number of sectors. The two countries’ multi-billion-dollar trade ties cover a wide range of sectors, including tourism, energy, construction and food. In two key areas, grain and gas, Turkey is preparing back-up plans. Russian companies canceled a 30 million euro electric infrastructure project to be completed in Moscow that had been awarded to the Turkish firm Anel Elektrik, the Turkish daily Hürriyet reported on Wednesday. The project involved the renewal of a sports stadium built in 1928 and is undergoing major renovations in preparations for the 2018 World Cup.
Spat with Russia prompts Ankara to reconfigure trade ties
Turkey’s worsening dispute with Russia over the downing of a Russian warplane is prompting Ankara to prepare to source vital food and energy imports from elsewhere, underscoring the dispute’s potential to upend lucrative trade ties.
On Wednesday, traders and analysts told Reuters Ankara was actively looking for alternatives to Russian grain because the spat had placed a question mark over future deliveries and put new deals on hold. Russia has not so far interfered with grain exports to Turkey, the largest buyer of Russian wheat, and vessels are departing Russian ports as normal apart from a few minor difficulties at some terminals. But traders in both countries say they fear that either Russia will restrict grain exports to Turkey or Ankara will limit deals with Moscow. “Turkish buyers remain worried about buying Russian commodities as no one knows what will happen, and the fact is that Russia is still defiant and increasing tensions,” one trader in Turkey said. “I’m still worried that Turkey could impose sanctions on Russian goods in response.” In a related move, two sources told Reuters Turkey was preparing to cut imports of liquefied petroleum gas (LPG) — used to power everything from cars to household stoves — from Russia by a quarter next year. Turkey has the most gas-powered cars in the world, with 40 percent of its vehicles running on LPG.
“Turkish firms are not simply worried about a reduction in LPG deliveries from Russia because of the current situation — they are already preparing for this,” one trader who works in the LPG market told Reuters. “It may be more expensive, but the process of how to ensure future deliveries from elsewhere is being worked out.”