The most important appointment this week was the meeting of the Monetary Policy Committee of the Turkish Central Bank last Thursday. With tension, it was expected whether the monetary guardians would make further interest rate steps, after one had recently, with 36% the highest inflation of the last 20 years. With the retention of the key interest rate of 14%, however, one sent the hoped-for signal to calm the markets and the Turkish lira even increased slightly.
President Erdoğan would presumably have liked to see further interest rate steps. Still, he is under increasing pressure in his own country and internationally, so the temporary omission of an interest rate step is no guarantee for a constant exchange rate. The president’s popularity is increasingly waning; the increased food and energy prices are too unpopular for the population. But companies are also complaining about rising restrictions, especially on capital movements. For example, companies now have to exchange a quarter of their export earnings into the Turkish lira to support the national currency’s exchange rate. This is a bitter measure, especially for exporters in the hazelnut market. But the president is also facing headwinds internationally. For example, the partnership with Russia is now strained by delivering drones to Ukraine. But the mood is no better about Europe either. For example, the refusal to release Turkish cultural promoter Osman Kavala now threatens consequences such as expulsion from the Council of Europe. The overall situation, therefore, remains conflict-laden and thus uncertain. If one relates this to the hazelnut market, there are already fears that politics could once again resort to unorthodox means to win over voters on the Black Sea coast about next year’s elections.
Apart from the political arena, the hazelnut market is currently very quiet. Neither for export nor the local market, there are significant deals. Therefore, raw material prices have also been slightly down this week. However, export prices remained almost stable due to the slight recovery of the Turkish lira. Fortunately, the differences between the offers of the individual sellers have now somewhat narrowed again.
The market expects the next impulse from the TMO’s statement regarding inventory’s selling price. This is expected in February.
About vegetation, there are no negative reports so far. The bushes would be about the same as last year, it is said from the origin. The first reliable statement is expected at the end of March and the first official harvest estimate will be made after the danger of frost ends in May. Thus, so far, these reports should only be seen as ruling out a worst-case scenario.
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- Turkish central bank keeps the key interest rate stable at 14%. Turkish lira can gain slightly.
- Still little activity in the market. Hardly any demand domestically, as well as for exports.
- Market continues to disagree on further development.
- Next impulse for the market will be the announcement of the selling price of the TMO. This is expected to take place in February.
- Commodity prices give way due to weak. Export prices also soften slightly.
- Offers from individual suppliers now tend to become more homogeneous again.