Hazelnut Market: The season is now coming to an end and the new harvest is just around the corner. The farmers in the coastal regions will start picking the kernels. If the weather remains stable and thus favors the drying of the kernels, the backlog in vegetation would be made up to one week by the hot days of the last week.
Preparations in full swing
Preparations for the hazelnut market’s coming season are now in full swing. Most factories will be closed next week for repairs and maintenance work as well as annual spraying measures. Many workers are on vacation. Accordingly, exports will be slower over the next two weeks. Surprisingly, there is still a great demand for prompt shipments. Therefore, it is possible that exports will break the 300,000 mt mark this season. The reason for the high demand is, on the one hand, that many buyers have only made the very short-term cover. On the other hand, we now see that the coming harvest will start at a significantly higher level than the current harvest. Therefore, especially the trade is still taking advantage of the current level to build up inventory somewhat.
Waiting for TMO price
The rumors that the TMO price would be published before August have not been confirmed. We do not expect this to happen until the end of next week at the earliest. Until then, the hazelnut market is likely to remain quite variable. However, we can already see that, in addition to an alignment of the indications of the new crop, even with prompt shipments, the outliers to the downside are decreasing.
From other origins, we are still hearing some reluctance so far, as the positioning of Türkiye is not yet clear. Since many buyers have already taken advantage of the attractive level of Türkiye in recent weeks for fourth-quarter covers, we do not expect that they will have an easy time in marketing. Due to the large surpluses, as well as the already partial coverage is likely to be specifically the origins of Azerbaijan and Georgia. The origin Italy is currently still holding back. The harvest is expected to be somewhat smaller in total than originally assumed, but it is still too early for a valid forecast.
With regard to the exchange rate, we are seeing some volatility over the week, however, this has not yet had any impact on the design of the export price lists. There is no decision in the pipeline for the coming week that could cause any dislocation.
In the coming week, it will be interesting to see whether the price increase of the last few days will be sustained, or whether it will be partially offset. We expect that the demand will now decline noticeably and buyers will again wait. And for the week after next, we expect trend-setting decisions.
Bullet Points
- Kernel picking will begin next week in regions near the coast.
- Raw material prices are now rising significantly, as expected. Gap to the coming harvest is closed.
- Demand for prompt shipments provides unexpected additional orders.
- TMO price release is likely to start late next week. The market continues to be
on hold. - Price lists continue to be very heterogeneous, but downward outliers are decreasing.
- The exchange rate was stable during the week, with hardly any impact on exporters’ price lists.