This week we have received very differentiated feedback from the hazelnut market. While the large exporters are reporting sales to the large industry, we are hearing complaints from the smaller and medium-sized exporters about a slump in demand. The smaller buyers in Europe are often more flexible when it comes to releasing suppliers, which is why many purchases are currently not taking place at the origin, but with European sellers who still have positions and can therefore offer more favourable prices than the origin itself. This results in a distorted picture of the situation based on the transactions.
Industry’s Flexibility and Pricing
Large industries have often lost this flexibility due to the internal definition of processes and therefore has to conclude contracts with producers. However, the current prices seem to have struck a chord with buyers. We are hearing of increased activity in Georgia, especially from Italian buyers. We are also hearing that the current level has exceeded a price threshold for the Chinese market, which has led to a decline in demand from this origin. Overall, sellers now seem to have realised that they should not overdo it, the question is whether the market leader can actually manage to express this.
Variability of exporters’ price lists
It is interesting to take a look at the sales activities of sellers. We are seeing increasing activity, especially on the German market. Again and again, buyers are being lured into small deals with targeted offers. There are also the first signs that sellers are trying to place long-term deals, which in the past was always an indication that the respective player was speculating on falling prices. Another interesting aspect is the continued heterogeneity of exporters’ price lists. There are still enormous differences in the hazelnut market between suppliers, although it is noticeable that offers are now closer together again, especially for natural cores.
What we are also seeing at the moment is that buyers are trying to assess the situation for the coming months.The following events are influencing this assessment.
Date | Event | Possible impact | |
March – 01 -10 | March 10, 2024 – Start of the Islamic month of Ramadan |
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11 – 20 | A cold front may hit the Black Sea coast | Rumours of possible damage could continue to unsettle the market | |
21 – 31 | March 21, 2024 – Monetary Policy Committee Meeting of the Turkish central bank March 31, 2024 – National regional elections in Türkiye | A decision in the sense of continuity of the situation is expected | |
April – 01 – 10 | The financial markets will assess the outcome of the elections April 10, 2024 – Feast of breaking the fast “Ramazan Bayrami” until April 14, 2024 |
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11 – 20 | Possible first TMO tender | The level of the prices set can influence the market. | |
21 – 30 | End of the frost risk April 25, 2024 – Monetary Policy Committee Meeting of the Turkish Central Bank Carrying out the counts for the official harvest estimate | A decision in the sense of continuity of the situation is expected, but not sure as it is the first meeting after national regional elections | |
May – 01 – 10 | May 10, 2024 – INC Congress in Vancouver – Official publication of this year’s harvest estimate | The results of the counts should already be known before congress, but there have already been surprises. | |
11 – 20 | The market will react in line with the harvest estimate |
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21 – 31 | May 23, 2024 – Monetary Policy Committee Meeting of the Turkish central bank | A decision in the sense of continuity of the situation is expected | |
A further depreciation of Turkish Lira
The hope of a devaluation of the Turkish lira is hardly being discussed by buyers. There are individual voices among sellers who expect that a further devaluation could take place before the new harvest. Looking at the chart of the last few months, a further depreciation of 10-15% within the next six months is a perfectly plausible scenario, despite the Turkish central bank’s now tighter monetary policy. However, it is questionable whether this will be enough to compensate for possible increases in commodity prices.
Selling price of TMO
Ultimately, the key points that will determine the further course of the hazelnut market are the selling price of TMO, which will probably be determined “politically”, and the result of the harvest estimate, which is not yet possible at this point in time, but will also be “political” to a certain extent. All in all, all that remains for buyers hoping for an easing of tensions is to wait and endure the coming rumours and speculation. However, it should not be forgotten that the market leader will continue to act as a buyer. After the unusual behaviour of this season, prudent behaviour is not necessarily to be expected in the further course of the year.
Bullet points
- Commodity prices show some ups and downs within the week, but the closing price shows the same level compared to the previous week in the hazelnut market.
- Demand is very varied. Large market partners are concluding contracts at the current level. Small market partners are living off positions from the spot market.
- Buyers are trying to assess the price risk – buying behaviour remains short-term oriented.
- The export price lists continue to show a very heterogeneous price picture.
- The Turkish lira is again trending slightly weaker, but there are no signs of a compensatory effect in the export price lists.
The following reports may be of interest to you:
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Turkish Hazelnuts: The Harvest Has Begun 
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