Hazelnuts: Turkish Market Tests a Floor as Structural Shift Accelerates
Turkish hazelnut prices test a floor after heavy correction, while TMO policy signals, global crop estimates and new origins reshape the market outlook.
Prices & Recent Performance
Kernel prices DDP Central Europe are stabilizing slightly above recent lows. Conventional raw 11–13 mm trade around EUR 9.85/kg, organic at roughly EUR 8.67/kg, with roasted 11–13 mm near EUR 12.73/kg. Roasted 2–4 mm and 0–2 mm remain discounted at about EUR 7.99/kg and EUR 6.78/kg respectively, while hazelnut paste is indicated around EUR 6.34/kg.
Despite this stabilization, the price curve over recent months is still deeply negative: around –0.95% week‑on‑week, –42.6% over the quarter, –59.2% on a six‑month view and –16.3% year‑on‑year. FOB indications from Turkey confirm this picture: natural 11–13 mm recently slipped just below EUR 8.00/kg and 13–15 mm to about EUR 8.40–8.50/kg, while Georgian kernels into Central Europe continue to command a clear premium above EUR 10/kg, highlighting Turkey’s price advantage but also the rising relevance of alternative origins.
Supply & Demand Balance
New INC figures signal a structurally more complex global balance. For 2025/26, world production has been revised down from 1.18 million mt to 1.08 million mt, with Turkey at about 518,000 mt. Yet global ending stocks are estimated to surge to roughly 162,700 mt, underlining that weak demand and prior large crops still overhang the market.
For 2026/27, projections point to an aggressive supply expansion: Turkey alone signals nearly 810,000 mt, taking world output to around 1.43 million mt against forecast consumption of 1.36 million mt. Many buyers question whether Turkey can realistically reach above 800,000 mt, given recent frost episodes, drought stress in western orchards and persistent pressure from the brown marmorated stink bug, but even more conservative outcomes still imply comfortable supply if demand does not rebound meaningfully.
On the demand side, export flows remain extremely weak, estimated at roughly 50% below last year. Demand destruction is now clearly visible: even after a 40–60% correction from previous peaks, downstream buyers and retailers show limited urgency to rebuild cover, relying instead on spot purchases and alternative origins. This forces exporters into fierce competition, especially in smaller kernel grades where ample low‑priced stocks persist.
Market Structure & Competing Origins
The competitive landscape is undergoing a fundamental transformation. Turkey remains the largest and still the benchmark origin, but it is no longer the uncontested price setter. The market leader’s global diversification strategy reduces structural dependence on Turkish volumes and enables a more opportunistic allocation of purchases.
The United States is poised to become the second most important origin as early as next season, with retail‑ready natural kernels gaining broad acceptance in Europe. Chile continues to play a strategic role, particularly in premium and controlled programs, where the market leader is willing to pay higher prices than in Turkey. Georgia has established a firm premium position in Central Europe, signalling strong demand for non‑Turkish origins when quality and reliability are proven.
China is emerging both as a producer and processor, raising concerns among Turkish exporters about losing high‑margin Giresun business in that market. Meanwhile, Italy struggles with repeated climate stress and downward revisions in crop expectations, limiting its ability to act as a stabilizing supplier. The net effect is a more diversified global supply base where buyers can arbitrage origins, and where Turkish policy and corporate strategies interact with, rather than dictate, global pricing.
⚖️ Key Short‑Term Drivers
🏢 Market Leader’s Purchase Bid
The turning point in sentiment came when the market leader re‑entered the Turkish market on 6 May with a new purchase bid. Although the bid level was perceived as relatively low, it provided a visible reference and brought much‑needed liquidity. Market feedback indicates that only about 4,000–4,500 mt (natural kernel basis) have been offered so far – well below what the buyer likely aimed for.
This limited seller response triggered a quick firming in natural kernel prices, while processed products stayed largely unchanged because small‑caliber material was not the focus of the program. The market now anticipates a revised, probably higher, bid. The scale and pricing of this potential follow‑up round will be critical for confirming whether the current price floor is durable or merely a pause in the downtrend.
TMO Tea Signal & Expected Hazelnut Floor
TMO’s recent decision to raise minimum tea purchase prices in the Black Sea region by roughly 40% year‑on‑year has had strong psychological impact among farmers. Historically, tea price adjustments have often foreshadowed hazelnut support levels, and many market participants now extrapolate this into expectations for hazelnut pricing in the coming season.
Under current assumptions, a 20–30% increase in TMO’s hazelnut intervention prices is widely discussed. Given today’s market levels, this would imply that during the TMO purchase window, new‑season prices might trade up to 20% above present quotations if all else remains equal. However, such a scenario sits uncomfortably beside the globally abundant supply picture and is viewed cautiously by European buyers, who fear that administratively supported prices could overshoot underlying demand and further suppress consumption.
💱 Macro & Financial Backdrop
The Turkish lira has firmed slightly against the euro in recent days – roughly 1% – but remains within normal volatility bands. Foreign exchange currently plays a secondary role compared with crop expectations, policy decisions and corporate procurement strategies.
Domestically, inflation of around 30% continues to underpin farmers’ price expectations and raises their resistance to selling at sharply lower nominal levels. Financing costs remain high, encouraging exporters to reduce stocks and interest burdens, which has already happened to some extent. This combination – a mildly stronger lira, high inflation and leaner exporter inventories – supports the idea that spot prices may struggle to fall significantly below current levels without a clear negative shock on demand.
Bullish vs. Bearish Factors
Bullish Elements
- Premium‑quality kernels, especially in desirable sizes, remain structurally tight, supporting price differentials even in a weak overall market.
- Current spot prices are below the hazelnut levels many expect TMO to support in the new season, creating potential upside once official interventions are announced.
- High domestic inflation and opportunity costs discourage aggressive farmer selling at current bids, especially if alternative crops like tea receive robust support.
- The market leader is paying comparatively higher prices in alternative origins such as Chile, signalling headroom for Turkish kernels if fundamentals tighten.
- Exporter stocks and associated financing burdens have been reduced, lowering the need for distress selling and strengthening the emerging price floor.
Bearish Elements
- Projected global production for 2026/27 significantly exceeds expected consumption, even if Turkey falls short of its optimistic 810,000 mt target.
- The market leader is no longer structurally dependent on Turkish supplies and can shift purchases to the U.S., Chile, Georgia or China if conditions warrant.
- Export demand from key destinations is still exceptionally weak, running at around half of last year’s pace, with clear evidence of demand destruction.
- Stockpiles of small kernels and industrial grades remain ample and cheap, capping any broad‑based recovery in processed and lower‑end segments.
- Favourable weather so far supports expectations of at least an average 2026/27 crop in several origins, adding to the perception of comfortable supply.
- Alternative origins are gaining acceptance in both retail and industrial channels, structurally reducing Turkey’s pricing power.
Weather & Crop Outlook
Weather conditions in the Turkish Black Sea belt through late winter and early spring have generally been supportive, with above‑average precipitation in February and no widespread freeze damage reported in recent weeks. Current short‑range forecasts point to seasonally mild, mostly stable weather in the core hazelnut provinces, without significant frost or heat anomalies expected in the immediate term.
However, the production outlook is not risk‑free. Past frost incidents, localised drought stress in western areas and the continuing presence of the brown marmorated stink bug keep agronomic risks in focus. Even if 2026/27 volumes ultimately reach only an average level, the combination of high starting stocks and additional supply from the U.S., Chile, Georgia and China could still maintain a broadly adequate global balance unless demand recovers more strongly than currently anticipated.
Trading Outlook & 3‑Day View
Strategic Recommendations
- Industrial buyers (Europe): Use the current stabilization phase to secure partial medium‑term coverage in premium natural kernels, especially 11–13 mm and 13–15 mm, where upside risk from potential TMO pricing and a higher second bid from the market leader is most pronounced. Maintain flexibility on small calibers, where oversupply persists.
- Exporters (Turkey): Avoid aggressive forward selling at today’s depressed levels before greater clarity on TMO’s hazelnut policy and the final shape of the market leader’s purchase program. Focus on quality differentiation and origin branding to defend premiums against rising U.S. and Georgian competition.
- Roasters & confectionery brands: Consider re‑entering coverage on a staggered basis, prioritizing origin diversification and spread opportunities between Turkish and non‑Turkish kernels. Lock in favourable differentials where Turkish prices trade at clear discounts to Georgian or Chilean offers.
3‑Day Price Indication (Directional)
Overall, the market appears to be carving out a floor rather than preparing for a sharp rebound. In the near term, prices are likely to trade in a narrow band, with the next decisive move depending on TMO’s hazelnut price announcement, the scale of the market leader’s follow‑up purchases, and early confirmation of 2026/27 crop potential.