TMO Inventory Release Post-Election:The Turkish Grain Board (TMO) is set to unleash 120,000 metric tons of hazelnuts into the market following the recent elections on March 30th.

Supply Abundance: With prices hitting unprecedented highs, March witnessed a surge in supply as both farmers and traders showed eagerness to sell. Despite this, buying interest at these elevated levels remained subdued. Current estimates suggest a stockpile of nearly 400,000 metric tons in Türkiye, indicating a robust supply.

Price Fluctuations: Prices soared to dizzying heights, peaking at $8.50/kg before experiencing a correction to below $8.00/kg due to an influx of sellers and limited buyer activity.

Optimistic Crop Forecast: The Exporter’s Association has issued a promising crop estimate of 805,000 metric tons for the 2024 season, buoyed by favorable weather conditions in March conducive to crop development.

Demand Side:

Selective Buying Amidst High Prices: Most buyers are opting to cover only immediate needs owing to the exorbitant prices. While some have reluctantly made purchases at higher rates for urgent requirements, many are holding off, anticipating more favorable pricing in the future.

Export Figures:Turkish hazelnut exports until the end of January tally at 185,000 metric tons, marking a 6% decrease compared to the same period last year. Tight demand dynamics persist amidst concerns over inflation and soaring prices of related commodities like cocoa.

Price Outlook:

Softening Prices: Prices have begun to ease from their peak levels, with further corrections anticipated due to favorable market fundamentals. However, sustained demand from key players and delayed purchasing by European buyers may provide temporary support to prices in the short term.

Long-Term Prospects:As the TMO offloads its inventory and with promising crop forecasts for the upcoming season, the market is poised for an eventual supply boost, triggering additional price corrections. Monitoring cocoa prices and their impact on consumption and demand in Q4 and beyond is crucial.

Bullish Trends:

• European Demand Support: Continued procurement by Europe for Q2-Q3 requirements is bolstering market sentiment.
• Inflation Hedge: In Türkiye, hazelnuts are serving as a hedge against soaring local inflation rates, maintaining domestic demand.

Bearish Trends:

• Price Sensitivity: Overinflated prices are dissuading bulk purchases, leading buyers to seek smaller quantities in the short term.
• TMO Intervention: The impending release of 120,000 metric tons from TMO stocks is expected to exert downward pressure on prices, further influencing market dynamics.
• Market Sentiment:High local interest rates are discouraging traders from stocking hazelnuts, contributing to market uncertainty amidst ample supply projections and favorable crop conditions.
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