Hazelnut Market: Disillusionment After the Price Surge of Recent Weeks

After last week’s price spike in hazelnut market, we saw prices stabilize this week and even fall slightly towards the end of the week.

What has happened over the past few weeks is largely due to the actions of a few players. They have been building up positions over the last few weeks/months and then unwinding them. There has been some selling in between, especially in the Akcakoca region.

The market leader seems to have bought larger quantities, which also explains why there is hardly any stock left on the open market. After the turn of the year, a few batches were traded between exporters at increasingly high prices. The low availability, high transparency and panicky behavior of some buyers in hazelnut market caused prices to rise so fast and so sharply. While most sellers had no position and bid at the current market price, those with a long position sold below the market price and were able to serve the unsettled buyers. Panic has now given way to disillusionment, but we are now facing a new situation.

Calmer market

In terms of demand, the market leader may not be under as much pressure as previously thought. The market should therefore become calmer in the coming weeks. Although many European buyers are not yet covered, most have decided to follow the market because of the high price level. If cover is taken out, it will be for around 3-4 months. Most buyers are hoping that the situation will ease in April/May with the TMO sellers and a positive crop estimate, as farmers are likely to sell their remaining stocks. However, this is based on the assumption that there will be no frost. Ultimately, this is still a speculative assumption.

Are major changes expected?

While the season is now more or less over in the Akcakoca region, the rest of the season will focus on the eastern Black Sea coast. Here the situation is still such that farmers are holding back and small commodity traders are running out of stock. A few exporters have long positions, while the majority have only short positions. As a result, they have had no interest in the recent price rises and have therefore stopped buying.

In the coming week, however, we expect some normality to return and sellers to regain their footing. However, we do not expect any major changes in the coming weeks. As some sellers have sold at the current level and some lots in Turkey are still trading at this level, we do not expect a major correction. However, it is likely that the large speculative premiums will be reduced and the price lists will become a little more homogeneous.

There are no major changes in exchange rates. The Turkish lira is fluctuating slightly up and down against the euro. The impact on export price lists is marginal.

Bullet Points

• After last week’s record highs, the hazelnut market is now reorienting itself.
• Commodity prices fall slightly again at the weekend.
• Based on raw hazelnut kernels 11-13 mm g/n DDP Central Europe
• Buyers have covered the bare essentials and are adopting a wait-and-see attitude again. However, small enquiries are keeping the market lively.
• The Turkish lira continues to trend sideways against the euro and US dollar.
• The export price lists continue to vary greatly, depending on the position of the exporters.