Hazelnuts: Stable but Heavy, as TMO and Big Industry Soak Up Supply

Hazelnut prices are broadly stable with a mild bearish bias: demand is softer than expected, but aggressive TMO procurement and strong buying from the largest industrial player are preventing a deeper correction. Overall, the market is finely balanced between weak global consumption and constrained farmer selling. Turkey’s 2026/27 crop looks large but weather-related quality problems and the wide premium of TMO and leading industry prices over the open market are pulling good-quality kernels out of free circulation. At the same time, macro headwinds in Europe continue to cap demand, leaving prices range‑bound rather than in a clear up- or downtrend.

Prices

Turkish hazelnut prices through October have been broadly stable with a slightly bearish tone, reflecting demand that remains weaker than earlier expectations. The open market continues to trade at a significant discount to TMO’s procurement prices of TL 255/kg (Giresun) and TL 250/kg (Levant) for 2026/27, underlining comfortable availability and subdued demand rather than any outright shortage.

FOB Turkey quotations in EUR confirm the sideways-to-softer bias. Conventional natural hazelnut kernels 11–13mm from Turkey (FOB Istanbul) are currently quoted at EUR 6.986, down from EUR 7.002 in late October, while natural 13–15mm kernels stand at EUR 7.523 (previously EUR 7.54). Organic 11–13mm hazelnut kernels FOB Izmir are at EUR 9.00, marginally below EUR 9.05 at the end of October. Georgian kernels traded FCA Warsaw are priced higher, e.g. natural 11–13mm at EUR 8.15 and 15+ at EUR 9.8, but have also eased slightly over recent weeks.

Supply & Demand

Turkey: large crop, slower arrivals, quality issues

The 2026/27 Turkish crop is widely estimated at 750,000–800,000 MT in-shell, clearly above average. However, persistent rainfall during harvest has delayed drying, slowed arrivals in September and October, and increased the incidence of rotten and damaged kernels. Early deliveries to cracking facilities looked promising, but later arrivals have shown noticeably weaker quality as more of the crop was exposed to rain.

Crucially, a large share of the better-quality crop appears to be flowing to TMO and the largest industrial buyer, who together are offering a 25–30% premium to open-market levels. This means that the quality seen in the free market is not fully representative of the overall crop potential, further tightening availability for buyers that rely on spot kernels.

Other origins

The Chilean crop, estimated at around 125,000 MT, is now largely traded. The largest industry buyer is reported to have taken 80–85% of this supply, limiting what is left for other buyers. In the US, Oregon’s hazelnut crop is tracking above earlier expectations at roughly 135,000 MT, and offers are broadly aligned with Turkish prices, but European demand for Oregon material this season appears limited.

Italy reports a mixed picture, with lower precipitation in the North and above-average, poorly timed rains in the South; overall, no catastrophic damage is flagged, but quality and homogeneity may be uneven. Georgian and Azerbaijani crops are in line with expectations, yet initial export figures also signal softer-than-normal demand, mirroring Turkey’s export performance.

Demand remains underwhelming

TMO began accepting deliveries at the end of August and has reportedly purchased around 150,000 MT so far, with expectations to reach 200,000–250,000 MT by year-end—slightly below initial ambitions but still a significant volume. The largest industrial buyer initially moved aggressively to cover kernels and has now also started securing in-shell volumes, lending important underlying support.

Most large industrial users are largely covered for Q4, whereas medium and smaller buyers are still seeking competitive short-term offers, providing some spot support. Even so, domestic Turkish consumption remains significantly below normal despite lower prices, and export data underline the demand challenge: annual Turkish exports fell sharply to about 197,000 MT last season (from 310,000 MT in 2025/26). The first two months of the new season reached roughly 43,000 MT—up on last year but still well below the long-term average of about 60,000 MT for the same period.

Fundamentals & Weather

Fundamentally, the market is pulled between sizeable global supply and policy-driven support. On the bullish side, TMO is expected to buy a substantial share of the Turkish crop, and many small and medium buyers have not yet fully covered nearby needs. Lower prices, combined with the strong TMO premium, also encourage farmers to hold back, constraining farmer selling at current open-market levels.

On the bearish side, most producing origins—including Turkey, Oregon and several smaller suppliers—are reporting well-above-average crops for the last 2–3 years. TMO’s logistical limits mean it cannot absorb the entire crop quickly; as its intake capacity is reached, more sellers may be forced back to the free market, keeping physical supply flowing. Weak demand across confectionery, retail and bakery segments, particularly in economically sluggish Central and Western Europe, remains the key brake on any sustained upside.

Weather-wise, the main harvest-related risk period in Turkey’s Black Sea belt has passed, but the heavy and persistent rains during drying have already translated into quality problems. Into November, the region typically remains wet, and further rainfall episodes could complicate storage and on-farm handling, potentially aggravating quality dispersion between lots.

Outlook & Trading Recommendations

Market outlook (4–8 weeks)

• Price direction: Sideways to modestly softer. Ample crops and weak demand argue for a slightly bearish tone, but strong TMO and industrial buying likely limit deeper downside.
• Quality spread: Expect a widening premium for high-quality kernels as top-grade lots remain concentrated with TMO and the largest buyer, leaving the open market with more mixed-quality offers.
• Flows: As TMO approaches operational intake limits, additional farmer selling into the free market could keep nearby supply comfortable despite apparent tightness in top qualities.

Trading recommendations

• Industrial buyers (EU confectionery, bakery): Use current stability to complete coverage for Q1 2027, especially for high-calibre and higher-quality kernels, where upside risk is greater than for standard grades.
• Roasters and traders: Consider selectively extending coverage in Turkish natural kernels while basis to TMO remains wide. Focus on lots with verifiable quality, as discounts on lower-grade material may persist or even widen.
• Farmers and origin sellers: Delivering to TMO remains attractive versus open-market prices. However, monitor TMO’s intake pace; if queues lengthen or limits are approached, be prepared for renewed pressure in free-market bids.

3-day directional price indication

• Turkey FOB kernels (Istanbul/Izmir): Broadly steady, with a slight downside bias for standard natural kernels if additional farmer selling emerges; premiums for organic and high-calibre lots expected to hold.
• Georgia FCA Warsaw: Stable to slightly softer, tracking the Turkish complex and reflecting slower European demand.
• Overall complex: No strong catalyst for immediate price spikes; short-term moves likely confined within a narrow range around current EUR FOB/FCA indications.