An Analysis of the World Market for Tobacco Production and International Trade and Its Importance for Turkey

This research will focus on the analysis of the world market for tobacco and its importance for Turkey covering the years 1990-2004 before the privatization of TEKEL. The reason for choosing specifically tobacco market is the importance of it for the specified years in Turkey. In these periods, as we will see in the analysis, Turkey was achieved to be the fifth largest tobacco producer and sixth largest tobacco exporter in the world. In addition, she was the world's leader in oriental tobacco production and exports. Although Turkey was a significant producer and exporter of oriental tobacco, the monetary value of tobacco imports and exports fluctuated over since 1960s and the composition of them had changed over the years. On the other hand, while oriental tobacco demand was decreasing in World and Turkey, other tobacco and cigarette imports had been growing considerably in Turkey. Turkey strategically placed between Europe and Asia was understandably seen as a key market by tobacco companies with increasing liberalization. However, various global issues such as serious economic problems in key markets in Asia and the former Soviet Union, decreases in support policies of the governments for the tobacco production with increasing liberalization in the World, decreasing demand of cigarettes especially in developed countries, and changes in politics of the countries on tobacco due to its negative effects on health have led to a serious drop in tobacco-cigarette production and consumption in the World, and therefore in Turkey. To sum up, these factors have negatively affected Turkey’s tobacco production and policies for the later years as foregone conclusion.