After a market trend reversal had already emerged because of the quality issue, this week we observed a further increase in momentum driven by the purchasing activity of the market leader in Turkish Hazelnut Market. As expected, the market leader announced its purchase offer of 130 TRY/kg for hazelnut kernels in shell and started its purchases. As expected, purchases are concentrated in the western growing regions. Similar to the past, the market leader also started extensive purchases from existing suppliers. We assume that the market leader will have purchased approx. 20% of its annual requirements by the end of September (estimated value: 250,000 mt hazelnut kernels in shell). However, due to the high proportion of 20-25% of small kernels (< 11 mm), we assume that the purchasing volume could be higher this year in order to compensate for the high level of waste, provided that sales figures do not fall dramatically due to the high price of cocoa.

Although we are currently seeing a good influx of raw materials into the market, including good qualities, raw material prices are continuing to rise.

• This is due to: Strong sales in recent weeks. The start of the market leader's purchasing activities.
• Exporters are divided into two groups: Some are working with the market leader. Others are choosing not to collaborate.
• Some of the market leader’s suppliers are committing to deliveries without having full stock, which has caused price manipulation:
  • Competitors are slightly raising prices to disrupt the market leader’s operations.
  • While this tactic was not important in previous years, in today’s uncertain environment it could create volatility.
• The overall market situation remains unclear:
  • Western growing regions have good quality but many small kernels, with some yield shortfall.
  • Eastern growing regions face more complexity:
    • The Samsun region has suffered, and a large portion of its kernels are unusable.
    • Ordu is mixed, while Giresun and Trabzon are relatively better.
  • The marmorated stink bug has caused more damage than anticipated:
    • Many kernels are unsuitable for processed products due to flavor changes.
    • This is affecting quality assessments, pricing, and expectations for raw material batches.

Rumours in all directions

It is currently still unclear what correction factor we are talking about for the harvest volume as a whole and how high the harvest actually is in Turkish Hazelnut Market. The sum of these speculations has led to rumours in all directions this week. Some are talking about a catastrophe and too few nuts this year, while others are still relaxed about the situation. The rumours have also led to alternative origins, especially Azerbaijan, massively increasing prices.

With regard to the TMO's purchasing activities, it should be noted that it is fortunately receiving little demand. It is assumed that it has so far been able to buy < 10,000 mt. Instead, the model of selling on a commission basis is flourishing again, which entails certain risks, but is currently favoured again due to the high financing costs.

Looking ahead to the coming week, we are curious to see whether the market will calm down again somewhat or whether momentum will continue to increase due to rising nervousness. At least there is currently some stability on the exchange rate side. All in all, however, we can look forward to a challenging season, especially with a view to the coming season, as dealing with the marmorated stink bug still does not seem to have been resolved.

Key Points

• The market leader begins its purchasing activities. As expected, its purchasing bid corresponds to the TMO price of 130 TRY/kg.
• The quantity and quality situation is unclear, resulting in many rumours at the moment and the market has turned. Raw material prices on the free market have risen significantly.
• Alternative origins are also already adjusting their prices.
• The damage caused by the marmorated stink bug is higher than expected, as certain lots are no longer usable as a result in Turkish Hazelnut Market. This situation is new for many market participants.
• Expectation of a two-tier market development. On the one hand, expensive natural and fully blanched kernels of good quality and favourable small-scale processed goods.
• The exporters' price lists continue to be very heterogeneous.
• The Turkish lira is stable this week

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