After the harbingers of the trend reversal could already be seen in recent weeks in the Turkish Hazelnut Market, this is now clearly evident, at least for the “key currency” of natural hazelnut kernels 11-13 mm. The main reason for the rise in raw material prices is the adjustment of the market leader's purchase offer. After the market leader was unable to purchase the desired quantities despite compromising on quality, it has now adjusted its purchase offer from 235 TRY/kg to 255 TRY/kg. The adjustment was also made in response to pressure from suppliers, who are now demanding higher prices to cover their costs due to increased costs.

Reluctant Suppliers

In recent weeks, this was somewhat concealed by the pressure of interest payments at the end of the quarter and the high inflow of raw materials into the market, but these factors are now disappearing. The next interest payment, which leads to liquidity requirements, is not due for another three months and most of the harvest has been harvested and the flow of goods at the local collection points is now decreasing. Although prices are still moderate at present, there are fewer and fewer suppliers willing to sell for them in the hazelnut market. We assume that exporters will adjust their price lists across the board from next week. However, it is important to note that this applies to nautreal cores for the time being. As there are still many small kernels and many low-quality lots, the prices for processed goods should not be affected as much by the price adjustments for the time being. However, as there is always an orientation towards the 11-13 mm, adjustments are likely to follow here too sooner or later.

Financing Costs

Furthermore, one should not forget that the financing costs and the increased wage costs (relevant due to higher sorting costs) are now increasingly changing the producers' calculations. Even if the exchange rate has taken a back seat in recent weeks, it continues to have a significant influence on price developments. What we are currently observing is that, similar to last year, most buyers are only taking out short-term and at most medium-term cover. Long-term cover is not an issue for most buyers due to the surcharges. We also feel that the quantity planning is rather conservative. The general uncertainty regarding sales in the coming year is clearly noticeable. However, producers in Turkish hazelnut market are expecting export figures to be the same as last season, or even slightly higher, as the Italian country of origin in particular is again expecting higher losses than originally expected. Business in the Turkish domestic market is also going well.

If you look at the current export figures for September, they are rather weak. However, you have to put these in relation to the current delivery delays. In October, a large part of the backlog is likely to be made up, and then the figures should show a much more positive picture.

Quality Issue Solved?

The quality problem remains unresolved. This is where the hazelnut market is divided. While some producers offer batches that meet the Class I quality standard, others are now adjusting the specifications and following the example of the market leader. There is still no uniform picture here. However, producers are now becoming increasingly aware of the need to act. The now decreasing temperatures are ensuring that the stink bugs are now slowly migrating from the higher elevations to the lower elevations. As a result, the population is now concentrated on a smaller area, which makes the extent of the proliferation of this invasive species frighteningly visible. Tests with beneficial organisms are already underway, but there is no solution that promises short-term improvement, with the exception of a long, severe frost.

Is Tmo’s Influence on the Market Decreasing?

It is interesting that the TMO was only able to buy small amounts of raw materials this year. There are no official figures, but it is said that less than 10,000 mt were delivered to the TMO, especially in the western growing areas. In the eastern regions, the deliveries were minimal. This is to be seen as positive for the future, as it means that the market power of the TMO is decreasing somewhat.

Key Points

• Market leader adjusts its purchase offer for natural kernels upwards (from 235 TRY/kg to 255 TRY/kg for natural 11-13 mm), as there were hardly any sellers for the first price quoted. The free market immediately followed the price adjustment.
• Quality problem with the harvest of natural kernels leads to adjustments in the market leader's quality standards. The free market is still in the discovery phase here.
• Alternative origins are now adjusting their prices in line with Turkey.
• Expectation of a two-pronged market development. On the one hand, expensive natural and fully blanched kernels of good quality and favourable small-scale processed goods.
• Exporters' price lists continue to be very heterogeneous.
• The euro lost some of its strength this week, which benefited the Turkish lira.

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