Market Update: Organic Hazelnuts – Challenging Times for the Industry
The organic hazelnut sector faces significant challenges this year. An infestation caused by the invasive brown marmorated stink bug has severely impacted Turkish hazelnut growing regions. This pest, originally from Georgia, has rapidly spread and now poses a significant threat to crops. The bug feeds on hazelnut tree leaves, causing the roots to dry out, which significantly hampers tree growth. Experts warn that if no effective measures are taken, up to 80% of next year’s crop could be lost.
Outlook for the Organic Market
The organic hazelnut market is particularly vulnerable as the use of pesticides on neighboring conventional fields can lead to unintended contamination of organic crops due to wind and rain. This contamination jeopardizes organic certification, making it difficult for producers to sell the nuts as organic. Tests on already harvested organic hazelnuts have revealed traces of prohibited substances, adding further strain to the market. Traders now face the challenge of dealing with products that no longer meet strict organic standards.
The situation is further complicated by global financial markets. Last week, the U.S. Federal Reserve (FED) reduced interest rates by 0.50 percentage points, while the Central Bank of Turkey (TCMB) kept rates steady. Despite these moves, the Turkish Lira weakened, adding to the uncertainty for exporters.
Ferrero’s Procurement Challenges
Ferrero, the world’s largest buyer of hazelnuts, continues to face challenges in securing supplies. While specific procurement volumes for 2024 are not available, Ferrero remains a dominant player in the Turkish hazelnut market, having acquired the Oltan Group in 2014, a leading company in hazelnut procurement. In recent years, Ferrero has expanded its investment in alternative production regions, including Australia, Georgia, and Chile, to reduce its dependence on Turkey. However, these projects have encountered climate-related and production challenges.
Current Price Developments:
Despite interest rate cuts in the U.S. and stable rates in Turkey, the Turkish Lira has continued to weaken. This has raised export costs, which could lead to price fluctuations on the international market. In the coming days, it remains to be seen how these developments will affect prices in the free market, particularly for organic hazelnuts.
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Outlook for the Organic Market
The organic hazelnut market is particularly vulnerable as the use of pesticides on neighboring conventional fields can lead to unintended contamination of organic crops due to wind and rain. This contamination jeopardizes organic certification, making it difficult for producers to sell the nuts as organic. Tests on already harvested organic hazelnuts have revealed traces of prohibited substances, adding further strain to the market. Traders now face the challenge of dealing with products that no longer meet strict organic standards.
The situation is further complicated by global financial markets. Last week, the U.S. Federal Reserve (FED) reduced interest rates by 0.50 percentage points, while the Central Bank of Turkey (TCMB) kept rates steady. Despite these moves, the Turkish Lira weakened, adding to the uncertainty for exporters.
Ferrero’s Procurement Challenges
Ferrero, the world’s largest buyer of hazelnuts, continues to face challenges in securing supplies. While specific procurement volumes for 2024 are not available, Ferrero remains a dominant player in the Turkish hazelnut market, having acquired the Oltan Group in 2014, a leading company in hazelnut procurement. In recent years, Ferrero has expanded its investment in alternative production regions, including Australia, Georgia, and Chile, to reduce its dependence on Turkey. However, these projects have encountered climate-related and production challenges.
Current Price Developments:
- Shelled, natural hazelnuts (11-13 mm): €6,43/kg
- Shelled, natural hazelnuts (13-15 mm): €6,56/kg
- Second choice (11-13 mm): €6,16/kg
- Second choice (13-15 mm): €6,30/kg
Despite interest rate cuts in the U.S. and stable rates in Turkey, the Turkish Lira has continued to weaken. This has raised export costs, which could lead to price fluctuations on the international market. In the coming days, it remains to be seen how these developments will affect prices in the free market, particularly for organic hazelnuts.
Click here to reach our trading platfrom CMBroker