The relationship between sunflower foreign trade and exchange rate in Turkey

Although sunflower seed cultivation, which benefits from broad adaptability, can be carried out with ease in many regions of Türkiye, domestic production remains insufficient to meet internal demand. As a result, a significant portion of the demand for both sunflower seeds and crude sunflower oil is met through imports. This study examines the relationship between Türkiye's sunflower foreign trade and exchange rates, focusing on the impact of exchange rate fluctuations on sunflower-related trade flows. Based on annual sunflower trade data for the period 2004–2023, Türkiye's average sunflower seed import value is approximately 376 million USD, while the average export value remains around 98 million USD. In the case of crude sunflower oil, imports average 677 million USD annually, whereas exports are limited to approximately 8 million USD. These figures reveal that Türkiye is particularly dependent on foreign supply in crude sunflower oil and maintains a trade structure that is highly sensitive to exchange rate fluctuations. In this study, monthly data covering the period from January 2017 to December 2023 on Türkiye's sunflower seed and crude sunflower oil foreign trade, as well as exchange rates, were compiled from TUIK and TCMB, and analyzed using the ARDL Bounds Testing approach. According to the findings, a 1% increase in the exchange rate leads to an approximate 0.32% rise in sunflower seed exports in the long run. Moreover, short-term deviations are corrected by about 92% in the following period, indicating a strong adjustment process. In the case of crude sunflower oil imports, a one-unit increase in the exchange rate results in a 0.70-unit increase in imports over the long term, while short-term deviations are corrected by approximately 39% in the subsequent month. Overall, the results suggest that exchange rate fluctuations significantly affect foreign trade in both the short and long term, highlighting the importance of enhancing domestic production and formulating policies to reduce import dependency.