Last week we have visited our suppliers in the Black Sea area. The hazelnut market in Turkey has shown relative low price levels in the past few months. Of course also this market has been strongly influenced by the uncertain Turkish economic situation and fluctuating Turkish Lira.
The crop had been expected to be about 640.000 mton in shell, back in May/ June, but due to more than expected empty shells, the general expectation nowadays has been adjusted to 550.000 to 580.000 mton in shell. Further the TMO in Turkey has another 77.000 mton carry over in hand and still 7.000 mton was left with the farmers of the 2017 crop. That comes down to a total of about 660.000 in shells, being 330.000 mton of kernels. This year’s export was about 350.000 mton of kernels.
The market has a delicate balance at this moment. On one hand we have TMO, who normally supports market levels for the Turkish farmers, by setting a firm purchasing price and then buying a substantial volume from the crop. However this year TMO has no government funds to do so and they have not declared any price yet. Further they have 77.000 mton in shell which they have to sell to get some cash in hands. However if they put this onto the market now, it will make prices drop further. .
On the other hand we have Ferrero as strongest single buyer of Turkish hazelnuts and influencer, who prefers stable relative low market levels. Ferrero buys about 30% of the crop and their purchasing prices to the farmers are also a benchmark for the rest of the industry. However not every farmer wants to deliver their crop to Ferrero, because they pay slightly lower prices and will try to keep these low. Nevertheless they pay the farmers cash, which not every packer can do. There is also some pressure on those prices of Ferrero from the farmers, because they expect them to also support them a bit with higher market prices. Further with the extreme inflation rates they rely on the biggest buyer/packer that they also support the business a bit from a broader point of view. With the current levels of about TL 12.- / kg. from Ferrero and around TL 13.- form other exporters, the 450.000 farmers in the Black Sea area have been a bit reluctant up till now, to bring their crop to the market. They are still hoping and expecting higher prices. Especially when next year February there will be regional elections again in Turkey.
We feel that with the more than average crops in Georgia, Azerbaijan and especially Italy, there will be enough hazelnuts for world demand in the coming season. Despite a relatively smaller crop than expected in Turkey, the economic developments and potential financial problems among packers will mainly determine the market in Turkey. They do not like to send farmers away when they come to sell, but if they lack the funds to purchase, farmers will have to adjust their levels to have their material sold elsewhere.
Today we see slightly firmer levels again in origin due to the Turkish Lira, but the market fluctuates on a daily term it seems.
If you have a specific request for any type of conventional or organic Turkish hazelnuts, please do not hesitate to contact us.