Power Shift in Hazelnuts: Turkish Market Stabilizes After Historic Correction

The hazelnut market has entered a consolidation phase after a historic price correction, with Turkish kernel prices stabilizing at significantly lower levels while power shifts away from Türkiye toward a more diversified global supply.

After months of volatility, the market is now broadly balanced, but for new reasons: slightly above-average crop prospects, structurally weaker demand and strong competition from Chile, Azerbaijan, Georgia and the US. Price formation is increasingly driven by policy (TMO minimum price) and the strategy of the leading industrial buyer rather than by Turkish crop size alone. Quality remains the key bottleneck for large, premium kernels, while small sizes and processed products are abundant and under pressure.

📈 Prices & Market Tone

DDP Central Europe prices for Turkish kernels 11–13 mm are around EUR 10.12/kg for conventional and EUR 8.63/kg for organic, with roasted kernels 11–13 mm near EUR 12.78/kg and hazelnut paste about EUR 6.39/kg. Small roasted fractions (2–4 mm, 0–2 mm) trade markedly cheaper, around EUR 7.94/kg and EUR 6.93/kg respectively, underlining the discount on non-premium material.

On a performance basis, benchmark kernel prices are flat week-on-week but down roughly 33% quarter-on-quarter and more than 57% versus six months ago, with a year-on-year decline of nearly 19%. This confirms that the sharp repricing is largely behind us and that a new, lower price plateau has formed. Recent FOB offers from Turkey around EUR 8.0–8.5/kg for natural kernels align with this stabilization, while Georgian kernels continue to command a premium in the low EUR 11/kg range FCA Central Europe.

🌍 Supply, Demand & Structure

Early field counts indicate a slightly above-average Turkish crop for the coming season, but last year’s frost and drought have left visible structural damage in orchards, especially affecting kernel size and quality. Weather since March has been generally favorable, with episodic snowfall above 900 m and current cool, wet spells in western and central Türkiye not causing meaningful additional frost damage. Frost risk for the 2026 crop is largely considered over, and current rain mainly raises localized disease and logistics concerns rather than a systemic yield threat.

Globally, alternative origins are in good shape: Chile, the Caucasus (Azerbaijan, Georgia) and the US Northwest report strong crops and rising export capability, reinforcing the shift toward a multi-origin supply base. Demand, by contrast, is structurally weak. High hazelnut and cocoa prices over the previous season have curbed usage in confectionery and spreads, and Turkish export volumes are estimated about 50% below last year, signaling a demand-side adjustment rather than a pure supply squeeze.

The most important structural change is that the leading industrial buyer is no longer forced to rely on Turkish supply, having secured alternative-origin volumes (notably Chile). This undermines Türkiye’s traditional pricing dominance. Combined with tight financing conditions and high interest rates, this limits stockholding appetite along the Turkish chain and keeps sellers cautious about carrying large unsold balances into the new crop year.

📊 Fundamentals: Quality, Currency & Policy

Quality has become the main fundamental driver. Large, clean natural kernels (especially >13 mm) are increasingly scarce and are priced noticeably higher than standard 11–13 mm material and processed fractions. Stricter rejection rates at industrial buyers further restrict the pool of acceptable premium kernels, effectively tightening the market segment that matters most for chocolate and praline applications, even while smaller sizes remain oversupplied.

On the macro side, the Turkish lira has shown short-term stability but remains on a long-term depreciating path, broadly in line with domestic inflation around 25–30% per year. Rising production and processing costs (labor, energy, sorting) and at least 27% higher processing costs versus a year earlier are eroding margins. Yet, for now, currency is a secondary driver compared to market structure and policy. Crucially, current export and DDP prices sit below what many market participants expect for the upcoming TMO intervention/minimum price, creating an embedded upside risk if Ankara opts for a farmer-friendly floor.

🌦️ Weather & Crop Outlook

Recent weather in key Black Sea growing provinces has been characterized by cool temperatures and intermittent rain, with isolated snowfall only at higher elevations. Forecasts for May point to generally mild to warm conditions (daytime highs in the low-to-mid 20s °C in many inland areas) with continued showers rather than damaging freezes. Severe convective systems and heavy rainfall episodes are being monitored but are currently assessed as localized risks to orchards and logistics rather than a major national-yield threat.

With blossom and early nut set largely completed and no major late frost damage reported, the probability distribution for the Turkish 2026 crop is skewed toward a slightly above-average volume but with ongoing quality challenges, especially for larger calibers. International projections for 2025/26 already show a comfortable global hazelnut supply, and the next INC crop update will help refine expectations. However, price formation is expected to hinge more on TMO policy and buying behavior of the market leader than on marginal changes in the crop estimate.

⚖️ Key Bullish & Bearish Drivers

📌 Bullish

• Premium, large-caliber kernels remain structurally tight due to orchard damage and stricter quality standards.
• Current prices are below many expectations for the new TMO minimum price, leaving room for policy-driven upside.
• Turkish inflation and rising production/processing costs support farmers’ and processors’ higher price ideas over time.
• Speculative losses in the previous rally have reduced aggressive selling, improving supply discipline in the premium segment.

📉 Bearish

• Strong crops in alternative origins (Chile, Azerbaijan, Georgia, USA) dilute Türkiye’s supply dominance and cap rallies.
• The market leader is structurally less dependent on Turkish supply and can arbitrage origins.
• High financing costs discourage long stockholding, increasing spot liquidity when buyers step back.
• Weak global demand and ~50% lower exports from Turkey indicate structural consumption headwinds.
• Abundant small kernels and processed fractions exert sustained downward pressure on average prices.

📆 Trading Outlook & Strategy

• Short term (next 4–6 weeks): Expect continued sideways trading around current levels, with limited downside as long as TMO expectations and quality premiums underpin the market. Brief weather- or headline-driven spikes are possible but likely to fade without policy confirmation.
• Buyers (industry, roasters, brands): Use current stabilization to cover a portion of Q3–Q4 2026 needs in standard and small kernels, but remain patient on large premiums until there is more clarity on TMO pricing and the INC estimate. Focus on origin diversification to leverage competition between Turkey and alternative suppliers.
• Sellers (farmers, exporters, processors): For standard and small sizes, consider forward sales on rallies given strong competition and weak demand. Retain some flexibility in premium, high-quality lots, where tightening could materialize if TMO sets an aggressive floor or if the leading buyer re-enters more forcefully.
• Risk management: Pay close attention to policy headlines and any signaling from the market leader. Weather is now a secondary risk; the main volatility triggers are administrative (TMO) and corporate (large tenders, origin switching).

📍 3-Day Price Indication (Directional)

Product	Location / Basis	Indicative Level (EUR/kg)	3-Day Bias
Natural kernels 11–13 mm TR	FOB Istanbul	≈ 8.0–8.1	Sideways
Natural kernels 13–15 mm TR	FOB Istanbul	≈ 8.5–8.6	Sideways to slightly firm
Premium kernels 11–13 mm GE	FCA Central Europe	≈ 10.6–11.1	Sideways