As expected, TMO published the selling price for additional volumes from the inventory at the beginning of the week. In line with forecasts, the price was 44 TRY/kg, significantly higher than the previous selling price of 41 TRY/kg. Accordingly, prices in the market increased. However, there are hardly any sellers. We also hear that the TMO has already been able to sell certain quantities (especially goods of the Giresunder variety) immediately. In principle, sellers are now inclined to buy and store goods, as President Erdogan announced in a speech that he would announce the purchase price for hazelnut kernels at the end of July and that this would be a price that would make farmers happy. A purchase bid of at least 45 TRY/kg is considered safe. However, there are already farmers who consider prices as low as 60 TRY/kg appropriate, given the hyperinflation in Turkey. Therefore, the tendency towards stockpiling on the part of exporters is understandable.
Although raw material prices have risen significantly, export prices have remained virtually stable, as the Turkish lira lost up to three per cent of its value against the euro or U.S. dollar in some cases over the week. The reason for this is statements by the President of the Republic regarding upcoming interest rate cuts, even though inflation in the country is at one of its highest levels ever, officially at around 73% (unofficially, there are estimates citing figures of up to 160%). The next meeting of the monetary policy committee of the (independent) central bank, which is due at the end of June, is therefore expected with excitement or concern.
Overall, we see a tendency towards rising prices in the price lists on average, but this may also be due to the current restraint of some sellers. On the other hand, we also continue to see that some sellers offer very aggressively for individual products. The market has therefore maintained its inconsistent character.
For the coming week, we do not expect any significant change in the situation. The market will follow the developments in the foreign exchange markets, as well as the purchasing behaviour of exporters. These can currently enjoy the continued bright export figures of the current season.
bullet points
- Commodity prices increase significantly as the market follows the TMO’s updated selling prices of 44 TRY/kg (last 41 TRY/kg).
- Export prices remain stable, however, as the Turkish lira has again depreciated further over the week as President Erdogan has held out the prospect of further interest rate cuts.
- The TMO will announce the sales price for the upcoming season at the end of July. A value of at least 45 TRY/kg is considered safe.
- However, first, farmers are already demanding prices around 60 TRY/kg given the high inflation in the country.
- Many sellers have become a bit more cautious. However, there are still offensive advances by some sellers for individual products.
- Buyer behaviour continues to be wait-and-see.