Hazelnut Market Activity Remains Low

This week was another quiet trading week. Concerning the 2021 harvest, individual coverings were still to conclude the season. Otherwise, the focus has now completely shifted to the 2022 harvest. The domestic market is quiet, as usual at this time, and exporters have also reduced purchasing activities. Therefore, we have also seen that commodity prices have fallen slightly this week. Especially the market leader has not been active in the market for quite some time.

However, we see hardly any differences in the exporters’ price lists compared to the previous week. However, the division of exporters into two camps continues to be characteristic, both with regard to prices for the 2021 harvest and the 2022 harvest. The main point here is likely to be speculation on the development of the exchange rate.

Concerning the exchange rate, it should be noted that it was pretty constant over the week. However, after the close of trading, we saw a massive swing of almost two per cent, which has not yet been explained. Concerning the Turkish lira, there is not much positive to report at the moment, so this plus is very surprising. Recently, for example, credit default swaps have set premiums for Turkey at an all-time high. Economists see the foreign trade deficit, the weak economic performance, and the galloping inflation as harbingers of a sovereign default, as more and more investors are fleeing government bonds. To counter this, the government has announced that it will launch a new type of income-indexed government bond in June to encourage citizens not to exchange their capital for foreign currencies to support the national currency. However, no exact details have been released so far. Against this background, the rash cannot be explained so far. However, we expect a statement on Monday.

Buyers are still waiting for prices to drop further. Many are still profiting from the favourable contracts from the previous year and want to see the level of the current calculation also in the coming year. Should this come into view, some buyers would be willing to cover a little longer again. Otherwise, they will probably only move from quarter to quarter.

For the coming week, we first expect clarification of the swing in the exchange rate. Therefore, Monday’s indications are likely to be different from Friday’s. But this should not lead to a change in the market. However, this should not lead to any change in the market situation. We expect the coming weeks to be quiet, at least until the TMO purchase price is announced.

bullet points

• Commodity prices fall slightly due to weak demand.
• However, export prices are almost the same as in the previous week.
• Buyers are exercising restraint, with little interest in long-term cover, as current prices are mostly still above the existing contract prices.
• Note the swing in the exchange rate after the close of trading, which has not yet found its way into the price lists.
• Seller market still very inhomogeneous.

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