The past trading week, just like the previous one, was an active trading week in Hazelnut Market. Thus, most of the trades concern the coming harvest, however, there are still surprisingly many (smaller) deals from the current crop. A large part of the requests for prompt loading comes from the wholesale trade. The latter had always accompanied the market so far and is now gearing up for the coming fall/winter season.
New crop will come two to three weeks later than usual
As the signs currently indicate that the coming crop will be more expensive than the current crop and will probably be on the market two to three weeks later than usual. We are currently seeing more interest in prompt shipments than originally expected. It is therefore not unrealistic that the target of exporting 300,000 mt can be achieved after all.
It should be noted, as already mentioned, that the upcoming harvest will probably be about two weeks later
than usual. This means that the picking of the kernels will start only around mid-August. The first trucks will therefore not be available on the market until mid-September. The heavy rainfall in the last few weeks could also have a negative impact on the quality of the kernels. Therefore we expect that the TMO will launch another call for tenders before the start of the coming season.
New crop price is likely to rise
Due to the good sales of the last few weeks and the renewed decline of the Turkish Lira, the starting price of the new crop is likely to be revised upwards again. Accordingly, depending on the price, a new call for tenders could be much more popular than last time. Currently, almost all major players (market leaders, exporters, Agricultural Union, etc.) are in the gardens to prepare the final crop estimate. First Interim reports show a slight downward revision. However, we do not expect that this will slow down the current optimism.
Overall, despite good demand, the price level of the raw material continues to be quite stable, although there are hardly any goods left at the dealers and crackers. Almost all sales have presumably sold against the exporters’ stock, there is hardly any demand in the local market. Furthermore, we also see the great differences in the price lists of the individual exporters. This is the case for both the current and the upcoming harvest.
With regard to the development of the foreign exchange market, we currently see the euro against the US dollar,
as well as the Turkish lira, are back on the upswing hence the Turkish lira tumbled again this week. The monetary policy committee of the Turkish central bank will meet next week again. The analysts are assuming that interest rates will rise again significantly.
For the coming week, we expect another active trading week. We also expect some players to take a more long-term approach again. While the trend is already visible for processed, the “high” expectations for natural kernels will still slow down this trend.
Bullet Points
- Busy trading week – exporters’ order books start to fill up.
- Demand for prompt deliveries is higher than expected
- Sales are made against stock of exporters.
- Harvest will probably be delayed by about 2 weeks due to weather conditions.
- The strength of the Euro pushes the Turkish lira further down
- Further interest rate hike by the Turkish central bank expected next week.
- Price lists for the 2022 and 2023 harvests vary widely – it’s worth comparing.
- Market awaits yet another call for tenders from the TMO. This time more interest is expected.