Market Report: Turkish Hazelnut Market – January 2025

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Market Overview

The Turkish hazelnut market has shown significant activity in January 2025. Since the turn of the year, raw material prices have risen sharply, driven by a combination of limited supply and anticipated purchasing activities by the market leader. Many market participants, including exporters and farmers, are holding back their stocks in the hope of further price increases. At the same time, uncertainty about future availability has fueled increased demand and higher prices.

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Price Trends

Current prices for Turkish hazelnut kernels (11–13 mm, g/n) DDP Central Europe:

• Conventional raw kernels: €8.12/kg
• Roasted kernels: €7.19–9.85/kg
• Hazelnut paste: €6.40/kg

Market changes compared to previous periods:

• 1 Week: +1.92%
• 1 Quarter: +8.41%
• 1 Year: +3.25%
• 3 Years: +33.77%

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Current Market Situation

1. Raw Material Supply:
   • Raw material availability is limited, as exporters and farmers are deliberately holding back stocks. Farmers not in urgent need of liquidity are retaining their inventory in anticipation of further price increases.
   • Exporters are building speculative inventories, especially in anticipation of potential purchases by the market leader.
2. Market Leader:
   • It is estimated that the market leader still needs to purchase 55,000–90,000 tons this season to meet its requirements. This demand is expected to further drive the market.
   • The market leader typically prefers long-term coverage and may need to act quickly in the face of rising prices.
3. Role of TMO (Turkish Grain Board):
   • The TMO has not made any new tenders so far and is expected to enter the market as a seller only in March or April.
   • Changes in TMO management may influence their sales strategies. It is expected that they will hold their stocks until after the frost risk period.
4. Quality Issues:
   • The 2024 harvest has a higher rejection rate due to quality issues. This has led to greater differentiation between high- and low-quality products.

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Market Factors

1. Bullish Factors:
   • The deliberate withholding of stocks by farmers and exporters could create an artificial supply shortage.
   • Stable demand from Europe and other core markets, particularly for high-quality products.
   • Anticipated adjustments to the market leader's purchasing bids could push prices higher.
   • High-quality natural kernels are likely to see strong demand in a segmented market.
2. Bearish Factors:
   • High production costs and rising financing costs are putting pressure on the industry.
   • The chocolate industry is pursuing cautious purchasing strategies due to uncertain sales forecasts.
   • Price ceilings in markets like China may limit export volumes.
   • Surpluses from the 2022 harvest could ease the market starting in March.

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Outlook

The market is characterized by a mix of uncertainty and speculative activity. In the short term, demand is expected to increase, particularly due to purchasing activities by the market leader and buyers seeking security. At the same time, quality issues and reduced availability of high-quality products are likely to lead to a highly segmented market. Discounts are expected for lower-quality products, while prices for premium natural kernels may continue to rise.

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Key Developments in the Coming Months

• Frost Risk: Weather conditions and potential frost damage will significantly impact forecasts for the next harvest.
• TMO Tenders: The activities of the TMO will play a decisive role in price development.
• Inflation and Financing Costs: Persistently high inflation and rising costs for storage and financing remain key challenges.

In summary, the Turkish hazelnut market in January 2025 is experiencing strong price increases driven by speculative activities, a restrictive supply strategy, and stable demand. The coming months will be shaped by weather conditions, TMO market strategies, and further speculation about the new harvest.

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