Hazelnuts in a Holding Pattern: Record Crop Story vs. Tight Kernels

The global hazelnut market in mid-March 2026 is being steered above all by developments in Turkey, and the picture is anything but straightforward. On paper, the story looks clearly bearish: the Turkish export union is circulating an exceptionally optimistic 2026 crop forecast of around 830,000 mt, inviting the narrative of a coming supply wave and encouraging exporters to offer new-crop material for Q4 2026 at levels well below today’s spot market. That prospect has already cooled physical buying appetite and is exerting pressure on current-crop offers. Yet in the physical kernel market, especially for good-quality natural kernels, the tone remains noticeably tighter than the headline figures suggest. Reliable, premium 11–13 mm material is structurally scarce, rejection rates at processors are elevated, and a significant share of farmers are still holding stocks, unwilling to sell aggressively before frost risk has fully passed.

This tension between a statistical bumper crop on paper and a fundamentally tight nearby balance is producing a split market. Larger, premium kernels and clean natural grades are trading with a resilient floor, while smaller sizes and processing-grade roasted goods are facing more meaningful downside as sellers try to move volume into a fragile demand environment. Birlin‑Mühle’s latest indications for DAP Central Europe show that conventional raw 11–13 mm kernels eased week on week but still sit well above one-, three- and five‑year benchmarks, helping explain why chocolate and confectionery users are noticeably restrained. The combination of high hazelnut prices and record cocoa costs is curbing demand, and market participants in Turkey now expect export volumes this season to fall by roughly 30% versus last year. At the same time, alternative origins such as Azerbaijan and Georgia are edging further into the spotlight, providing buyers with more leverage and limiting Turkey’s traditional ability to dictate global prices. Against a macro backdrop of 30% domestic inflation, a policy rate at 37% and a structurally weakening lira, financing and opportunity costs remain crucial drivers of farmer behaviour. In this environment, the hazelnut market is neither clearly bullish nor clearly bearish: it is locked in a waiting game in which spring weather, flower-to-nut conversion and the durability of the 830,000‑mt narrative will determine the next decisive move.

📈 Prices & Market Structure

Spot kernel indications (Birlin‑Mühle, DAP Central Europe)

According to the latest Birlin‑Mühle report (15 March 2026), Turkish hazelnut kernel offers DAP Central Europe for current crop 11–13 mm show the following structure:

Product	Specification	Price (EUR/kg)	WoW change (EUR/kg)	Comment
Organic kernels	Raw 11–13 mm g/n	12.21	0.00	Stable; niche but tight availability
Conventional kernels	Raw 11–13 mm g/n	10.80	-0.28	Pressure from 830,000‑mt crop story
Roasted kernels	Net 11–13 mm	14.86	-0.52	Correcting from elevated levels
Roasted kernels	Net 2–4 mm	9.59	-0.48	Cheaper, volume-driven market
Roasted kernels	Net 0–2 mm	8.58	-0.25	Bearing the brunt of demand weakness
Paste	Hazelnut paste	7.41	+0.01	Stable; slight firming on processing demand

Recent FOB offers & alternative origins

CMB’s live offer data corroborate the gentle easing signalled by Birlin‑Mühle. For Turkish origin FOB Istanbul (updated 16 March 2026):

Origin	Product	Term	Latest Price (EUR/kg)	1‑week change (EUR/kg)	Sentiment
Turkey	Hazelnut kernels natural 13–15 mm	FOB Istanbul	10.88	-0.23 (from 11.11)	Mildly bearish, driven by crop expectations
Turkey	Hazelnut kernels natural 11–13 mm	FOB Istanbul	10.40	-0.12 (from 10.52)	Soft tone; buyers waiting
Turkey	Roasted kernels, meal	FOB Istanbul	8.00	-0.15 (from 8.15)	Under pressure from weak processing demand
Turkey	Roasted kernels, diced 2–4 mm	FOB Istanbul	9.00	-0.15 (from 9.15)	Cheaper grades leading the decline

Alternative origins in Central Europe (FCA Warsaw, Georgia origin) are currently offered at a modest premium to Turkish product, reflecting good acceptance but smaller scale:

Origin	Product	Term	Latest Price (EUR/kg)	1‑week change (EUR/kg)	Comment
Georgia	Natural kernels 11–13 mm	FCA Warsaw	11.55	-0.10	Approx. 1.1 EUR/kg above Turkish 11–13 mm
Georgia	Natural kernels 13–15 mm	FCA Warsaw	11.85	-0.10	Premium for origin and quality positioning
Georgia	Kernels 15+	FCA Warsaw	12.05	-0.10	Large sizes in tight supply

Performance over time

Birlin‑Mühle’s performance snapshot underlines how the market is simultaneously correcting and still historically expensive:

Period	Performance	Interpretation
1 week	-3.25%	Short-term correction on new‑crop optimism
Quarter	-12.12%	Progressive easing since frost‑driven highs
Half-year	-34.45%	Significant normalization after 2025 frost
1 year	+28.03%	Still well above last year’s level
3 years	+43.04%	Strong multi‑year appreciation
5 years	+45.48%	Hazelnuts remain structurally dear
10 years	+32.10%	Long‑term uptrend intact

🌍 Supply & Demand Balance

Turkey: paper surplus, physical tightness

• 830,000‑mt harvest forecast: The export union’s estimate for 2026 is the dominant driver of sentiment. Birlin‑Mühle stresses that this figure is viewed skeptically by farmers and is statistically unusual so soon after a frost year, particularly given last year’s drought damage and persistent pest issues (brown marmorated stink bug).
• Behavioural impact: Regardless of its agronomic credibility, the forecast is already changing behaviour. Exporters are offering 2026‑crop material for Q4 at significantly discounted levels relative to current‑crop prices, and many industrial buyers are reading this as a signal to delay coverage.
• Farmer stock‑holding: Many Turkish farmers remain reluctant sellers before May, when frost risk is largely behind the market and when they hope for further intervention from the market leader or another buying tranche. This contributes to limited availability of top‑quality product despite the optimistic crop narrative.
• Quality split: The market is bifurcating into a firmer segment for good natural kernels and a softer one for smaller and processed grades. High rejection rates at processors reinforce premiums for clean, well‑dried kernels, while abundant cheaper material exerts downward pressure at the lower end.

Global & alternative origins

• Turkey’s dominance persists: Turkey still accounts for roughly two‑thirds of global hazelnut supply, but its share has been gradually eroding as other producers scale up.
• Azerbaijan: In 2025 Azerbaijan exported about 18,700–19,000 tonnes of hazelnut kernels, earning roughly USD 170 million, marking strong value growth on only modest volume changes. Rising export values underscore its status as a credible alternative origin for European buyers.
• Georgia: Georgian hazelnut production reached around 43,600 tonnes in 2024, close to record levels, with exports of roughly USD 115 million in the first ten months of 2025. EU buyers are increasingly familiar with Georgian kernels, which now command only a moderate premium over Turkish offers in Central Europe, as reflected in CMB’s FCA Warsaw indications.
• Other origins: Italy, Chile and the USA continue to provide niche and regional supply, but the current competitive challenge for Turkey primarily comes from the Black Sea neighbours, whose product can often substitute directly in industrial recipes.

Demand: fragile and price‑sensitive

• Subdued downstream buying: Birlin‑Mühle characterises demand as hesitant. Elevated kernel prices relative to history, combined with extremely high cocoa prices, are squeezing chocolate and confectionery margins. Manufacturers are cautious in committing to forward coverage at current levels.
• Expected export decline: Market participants anticipate Turkish hazelnut exports could be about 30% lower year on year, and early chocolate sales data reportedly point in this direction. This represents a structural softening on the consumption side compared with the post‑frost scramble of 2025.
• Substitution and reformulation: High absolute prices encourage recipe changes (lower nut content, partial substitution with other nuts or inclusions) and smaller pack sizes, all of which curb volume demand.

📊 Fundamentals & Macro Drivers

Turkey’s financial backdrop

• Interest rates: The Turkish central bank has held its policy rate at 37%, according to Birlin‑Mühle, as it navigates high inflation and geopolitical risks. High borrowing costs increase the carrying cost of inventories and incentivise farmers and traders to demand higher prices as compensation.
• Inflation: Domestic inflation is still around 30%, eroding purchasing power and lifting production costs (labour, fertiliser, energy). This supports a higher nominal floor for lira‑denominated farmgate prices, even if export prices in EUR drift lower.
• Currency dynamics: Recent Middle East tensions have strengthened the USD against the EUR, and the Turkish lira has gained about 1.5% versus the euro over the latest week, although Birlin‑Mühle notes this had limited effect on export lists, as raw material dynamics dominated. The longer‑term trend remains one of lira depreciation of roughly 25–30% per year, which tends to offset part of cost inflation and make Turkish exports more competitive over time.

Speculation and positioning

• Expectation‑driven market: The current hazelnut market is not trading purely on physical availability but increasingly on expectations around the 2026 crop. This magnifies the price impact of every new headline on bloom conditions, frost risk and official forecasts.
• Farmer and trader behaviour: After the severe frost year, many market participants turned into speculative holders, financing stocks at high interest rates. These players now require a premium to cover carrying costs, contributing to the resilience of nearby prices for good quality even as the forward curve softens.
• TMO activity: TMO’s recent move to sell roasted hazelnut material directly to local companies is seen by Birlin‑Mühle as a local disturbance without significant export‑market impact at this stage.

Alternative origins as structural change

• Reduced Turkish pricing power: Birlin‑Mühle emphasises that, for the first time this season, key international buyers are not forced to buy under time pressure in Turkey because they can access sufficient volumes from Azerbaijan, Georgia, Chile and the USA. This has fundamentally altered the balance of power and is a medium‑term bearish factor for Turkish premiums.
• Policy backdrop in Georgia: Georgia’s government has supported the sector through the Hazelnut Production Support and Subsidy Programs, which helped farmers invest in pest control and orchard management. While the dedicated subsidy scheme is scheduled to end in 2026, authorities argue that hazelnut farming has now become profitable enough to stand on its own.
• Azerbaijan’s expansion: Azerbaijan continues to register steady growth in hazelnut export value, benefiting particularly when Turkish supply is disrupted by frost or weather extremes.

🌦️ Weather Outlook & Crop Risks

Turkey (Black Sea region – Ordu, Giresun, Samsun)

For mid‑ to late March 2026, medium‑range forecasts for the Turkish Black Sea coast point to relatively mild, seasonally cool conditions with scattered rainfall and no immediate indication of severe frost events at sea level. However, elevated inland areas remain at some risk of late cold snaps, especially during clear nights.

• Flowering status: Birlin‑Mühle notes above‑average flower counts in regions like Ordu, which on paper supports the 830,000‑mt narrative. But the conversion from flowers to marketable nuts is heavily dependent on weather through April and early May.
• Historical frost damage: Industry reports from 2025 highlighted that frost damage in higher‑altitude orchards (above roughly 400 m) in provinces such as Giresun and Samsun can reach 50–70% in bad years. This underlines how quickly the optimistic forecast could be revised if a significant cold spell emerges.
• Western zones: Shrubs in western production zones suffered from last year’s drought and high temperatures, and recovery remains incomplete. This may cap yield potential even under favourable 2026 weather.
• Pest pressure: The brown marmorated stink bug problem has not been structurally resolved and remains a downside risk to realised yields and quality, particularly if warm, humid conditions favour population growth.

Georgia & Azerbaijan

• Georgia: Current weather indications for western Georgia (Samegrelo, Guria, Adjara), key hazelnut areas, suggest normal to slightly wetter‑than‑average conditions for March, supportive of vegetative growth but requiring vigilant disease and pest control. Local analyses point to a sector where high export prices coexist with orchard stress and disease challenges.
• Azerbaijan: Along the Lankaran and Gakh‑Zaqatala belts, March weather is forecast to be generally mild with periodic rains. No major anomalies are currently flagged, implying a neutral to slightly supportive stance for the 2026 crop, albeit on a much smaller base than Turkey.

🌐 Global Production & Stocks

While the Birlin‑Mühle report focuses on Turkey, the broader context is essential:

• World production: Global hazelnut output in recent seasons has hovered around 1.2 million tonnes (in‑shell equivalent), with Turkey supplying roughly two‑thirds, followed by Italy, Azerbaijan, the USA, Chile and Georgia.
• Georgia: According to FAOSTAT, Georgia’s production hit about 43,600 tonnes in 2024, ranking it 6th globally and signalling a sustained upward trend after years of investment and pest‑control programmes.
• Azerbaijan: Azerbaijan’s exports have grown steadily in value, reflecting improved quality and stronger demand. In 2025, exports reached about 18,973 tonnes worth around USD 170–171 million, highlighting the country’s role as a flexible supplemental supplier when Turkish availability is constrained.
• Stocks: Official global stock data are sparse, but anecdotal evidence from Turkey suggests that a meaningful share of 2025 crop kernels remains in farmer and trader hands. This stock overhang is one reason why the market can feel fundamentally tight at the quality end while still fearing medium‑term surplus if the 830,000‑mt crop actually materialises.

📌 Market Assessment: Bullish vs. Bearish Forces

Bullish elements (supporting prices)

• Limited availability of good‑quality natural kernels and structurally elevated rejection rates at processors.
• High domestic inflation and financing costs in Turkey, with a 37% policy rate pushing up carrying costs and price expectations.
• Rising production costs (labour, inputs, energy) and ongoing contractual delays and performance issues that make sellers cautious about over‑committing.
• Unresolved agronomic risks: pest pressure (brown marmorated stink bug) and potential late spring frosts, especially in higher‑altitude orchards.

Bearish elements (capping prices)

• The dominant narrative of an 830,000‑mt Turkish harvest, which encourages forward selling at discounts and emboldens buyers to wait.
• Subdued global demand, particularly from the chocolate sector suffering from both high hazelnut and record cocoa prices.
• Expected 30% decline in Turkish hazelnut export volumes this season, reflecting both weaker demand and high prices.
• Growing acceptance and competitiveness of alternative origins (Azerbaijan, Georgia, Chile, USA), which reduce Turkey’s ability to dictate terms.
• Large volumes of smaller kernels and processed grades offered at lower prices, dragging on the overall complex.

📆 Trading Outlook & Recommendations

Short-term (next 1–4 weeks)

• Price path: The market is likely to remain in a holding pattern through and shortly after Eid al‑Fitr, with limited liquidity as many Turkish factories close by mid‑week. Current‑crop prices may face gentle further pressure from continued new‑crop offers but are unlikely to collapse sharply as long as quality kernels remain hard to source.
• Volatility drivers: Any credible revision of the 830,000‑mt forecast, reports of frost in higher‑altitude orchards, or renewed lira weakness could quickly jolt prices.

Medium-term (Q2–Q3 2026)

• If weather stays benign: Confirmation of a large, good‑quality Turkish crop would justify lower forward prices for 2026/27 shipment and could pull nearby values gradually lower as farmer selling accelerates after May.
• If weather disappoints: Any combination of frost, drought or pest flare‑ups would sharply undermine the record‑crop narrative and could re‑tighten the market, especially given limited buffer stocks of premium kernels.
• Demand recovery: A soft global macro environment and high cocoa prices argue against a rapid rebound in chocolate demand, suggesting that even in a weather‑disrupted scenario the upside may be more contained than in 2025.

Strategic recommendations

• For industrial buyers (chocolate, confectionery):
  • Use current softness in smaller and processed grades (roasted dice, meal) to secure partial coverage for Q2–Q3 2026 at staggered intervals.
  • For premium natural 11–13 mm and 13–15 mm, maintain a balanced approach: cover near‑term needs to hedge against weather risks but avoid over‑committing far forward until there is more clarity on bloom‑to‑nut conversion.
  • Consider diversifying a limited share of origin portfolio into Azerbaijan and Georgia to improve supply security and negotiating leverage.
• For traders and shellers:
  • Be cautious in extending aggressive forward sales based solely on the 830,000‑mt figure; build in weather and pest risk premiums.
  • Focus on securing and segregating high‑quality lots, which are likely to retain relative value even in a broader downtrend.
  • Monitor financing conditions closely; with policy rates at 37%, long stock‑holding strategies must be disciplined and price‑target driven.
• For farmers in Turkey:
  • Avoid assuming that last year’s frost‑driven price peaks will repeat; demand conditions and alternative origins have structurally changed.
  • Consider staged selling once frost risk diminishes, particularly if local currency weakness offers attractive lira returns even at slightly lower EUR prices.

🔭 3‑Day Regional Price Outlook (all in EUR)

Reference date: 16 March 2026. Changes are indicative and assume no major weather or policy shocks.

Region / Contract	Current Level (EUR/kg)	D+1	D+2	D+3	Bias
Turkey FOB Istanbul – natural 11–13 mm	10.40	10.35–10.45	10.30–10.45	10.30–10.40	Mildly lower on weak demand, limited trades
Turkey FOB Istanbul – natural 13–15 mm	10.88	10.80–10.95	10.75–10.95	10.70–10.90	Sideways to slightly lower; quality supports floor
Turkey FOB Istanbul – roasted dice 2–4 mm	9.00	8.90–9.00	8.85–8.95	8.80–8.95	Soft tone amid fragile processing demand
Turkey FOB Istanbul – roasted meal	8.00	7.95–8.00	7.90–7.98	7.90–7.95	Slight downside as sellers seek liquidity
Georgia FCA Warsaw – natural 11–13 mm	11.55	11.50–11.60	11.45–11.60	11.45–11.55	Mostly stable; niche demand and tighter supply
Georgia FCA Warsaw – natural 13–15 mm	11.85	11.80–11.90	11.75–11.90	11.75–11.85	Stable with modest premium to Turkish origin

Overall, the hazelnut market over the coming days should remain technically soft but range‑bound, with liquidity thinned by holidays and participants reluctant to take large new positions ahead of the key spring weather window.