Hazelnuts under Pressure: Cheap Today, Tight Tomorrow?

Prices for Turkish hazelnuts remain under noticeable pressure, even as massive state buying and poor crop quality quietly set up a much tighter market for 2027. Industrial buyers can still secure attractive levels for kernels and processed products, but the window for high-quality material may close faster than usual. The current season combines unusually weak farmer economics, aggressive state intervention and widespread quality problems. TMO has already absorbed more than 190,000 t of in-shell hazelnuts and may reach about 240,000 t by year-end, while heavy rains, difficult drying and pest pressure have sharply reduced kernel yields in many orchards. At the same time, export demand is still below past peaks and financing costs in Turkey are extremely high, keeping the free market sluggish despite low prices. This divergence between comfortable headline stocks and limited merchantable quality is the key risk for the second half of the 2026/27 season.

Prices

European offer prices DAP Central Europe for Turkish hazelnut kernels continued to soften in early November. Conventional natural kernels 11–13 mm are indicated at 7.26 EUR/kg DAP, down 0.25 EUR/kg week on week, while roasted kernels 11–13 mm stand at 9.83 EUR/kg (−0.28 EUR/kg). Organic raw 11–13 mm is quoted at 8.44 EUR/kg (−0.13 EUR/kg), reflecting only a slightly firmer structure than conventional. Fine processed grades are more resilient: roasted kernels 2–4 mm are at 6.94 EUR/kg (+0.02 EUR/kg), roasted 0–2 mm at 6.51 EUR/kg (+0.13 EUR/kg), and hazelnut paste at 5.64 EUR/kg (+0.14 EUR/kg).

FOB Turkey quotations show a similarly heavy tone. Natural Turkish kernels 11–13 mm are currently around 6.986 EUR/kg FOB Istanbul, with 13–15 mm at 7.523 EUR/kg. Roasted diced 2–4 mm trades near 6.8 EUR/kg FOB, roasted meal at 6.2 EUR/kg. Organic Turkish kernels 11–13 mm are about 9.00 EUR/kg FOB Izmir, and organic 13–15 mm around 9.5 EUR/kg. Georgian natural kernels remain at a premium, with 11–13 mm roughly 8.15 EUR/kg FCA Warsaw and 13–15 mm 9.1 EUR/kg FCA, underlining that alternative origins are still priced above Turkish levels.

On a performance basis, the reference price for raw Turkish kernels 11–13 mm DDP Central Europe shows a weekly decline of 3.54%, a quarterly drop of 18.12% and −16.21% versus six months. The reported 12‑month change of −88.69% underscores how dramatic the price correction has been compared with last year and signals that the market has largely priced in a big crop and subdued demand, even if that exact figure should be treated with caution before publication.

Supply & Demand

The Turkish crop is large on paper, but quality and state intervention are reshaping supply. TMO has already purchased more than 190,000 t of in-shell hazelnuts and publicly signals that at least another 50,000 t could follow by December 31, 2026, implying a potential total volume around 240,000 t. These purchases primarily capture better-quality material, while many weaker lots remain in the free market. At the same time, high rainfall during September delayed harvest and drying, and the brown marmorated stink bug has further damaged the crop.

Kernel yields (Randuman) illustrate the problem: instead of a normal 50% kernel recovery, many lots are now below 40%. A drop from 50% to 40% represents a 20% reduction in recoverable kernels for the same volume of in-shell product, with some orchards reporting even lower levels. As a result, farmers are squeezed between low nominal prices and sharply lower saleable output. In the free market, in-shell prices differ widely by quality, with nominal bids of roughly 150–185 TRY/kg translating into much lower effective returns once quality deductions and poor yields are accounted for.

Demand remains underwhelming. Turkish exports have improved somewhat versus the previous season, but still fall well short of historical highs. Even after a major price correction, international buying interest has not fully recovered, and domestic Turkish consumption is described as significantly below normal. In the Caucasus, exporters in Georgia and Azerbaijan also struggle with weak European demand, particularly from Italy. Azerbaijan in particular is cautiously optimistic that Turkish quality problems and a tighter later balance could redirect some demand, but this will depend on relative pricing versus Turkey.

Fundamentals & 2027 Risk

The key structural issue is not the headline crop size, but the effective availability of high-grade natural kernels once quality losses, TMO stocks and exporter minimum inventories are deducted. A detailed supply balance for 2026/27 under three scenarios (optimistic, average, pessimistic) shows that, after accounting for carry-in from 2025, new crop, estimated quality losses and likely export and domestic use, the total overhang may range from 275,000 t to a slight deficit of 30,000 t (in-shell equivalent). However, subtracting assumed TMO holdings and the permanent working stocks of exporters leaves the free market with only 25,000 t in the optimistic case and calculated deficits of 157,500 t to 340,000 t in the other two scenarios.

These modelled gaps are not yet physical shortages but they clearly illustrate how quickly the balance could flip if exports accelerate and TMO continues to hold back product. Market participants already discuss the possibility that TMO might release around 100,000 t in the second half of the season, in which case the state agency would effectively become one of the largest potential suppliers. Yet it is widely assumed that such sales would not occur below the state’s own purchase cost. With better in-shell qualities in the free market currently around 185–200 TRY/kg, expected later-release levels of 280–300 TRY/kg would imply a substantial price step-up if the market needs to tap those stocks.

Financing conditions are another critical fundamental. Reports of annual interest costs near 40% and increasingly restrictive credit lines mean that holding speculative stocks of risky-quality hazelnuts is unattractive. Even at today’s low prices, traders are reluctant to build inventory when storage carries quality and financial risk. This explains why the free market remains soft despite large state purchases: liquidity constraints and quality uncertainty prevent the usual stocking response that would otherwise underpin prices.

In the organic segment, the picture is even more fragile. Suspected pesticide use against the brown marmorated stink bug in some orchards could compromise organic certification for affected lots. If more shipments lose their organic status after testing, the certified organic supply pool would shrink significantly, and unlike in conventional markets, these shortfalls cannot simply be bridged by downgrading to standard quality from other origins. That sets up a disproportionately tight outlook for organic kernels in the second half of the season.

Weather & Regional Outlook

The immediate weather risk for the 2026 harvest has already materialised: above-average rainfall during September across major Turkish Black Sea regions delayed picking and drying, contributing to the poor kernel yields and higher defect rates now visible in many lots. Looking ahead to the coming weeks, the main concern shifts from field weather to storage conditions and the risk that hidden damage in marginal-quality stocks will emerge during longer warehousing.

For competing origins, there is no short-term weather shock offsetting Turkey’s challenges. In Oregon, the 2026 crop is reportedly tracking above earlier expectations at roughly 135,000 t, with offers broadly aligned with Turkish prices but limited additional pull from Europe so far. In the Caucasus, normal seasonal patterns prevail, and the key question is more about trade flows and price positioning than immediate climate stress.

Trading Outlook

• High-quality natural kernels: Use the current weak market to review and partly extend cover into late 2026 and early 2027, especially for strict-quality applications. Favour staggered purchases rather than a single large commitment to manage the timing risk around any TMO release.
• Processed and smaller calibres: For roasted dices, meals and small calibres, where supply remains more comfortable and competition from alternative origins is stronger, buyers may keep a more hand-to-mouth strategy, opportunistically extending when dips occur.
• Organic supply: Food manufacturers depending on certified organic kernels should treat 2027 supply as a potential bottleneck. Consider bringing cover forward and tightening specification management and residue testing to avoid late surprises.
• Origin diversification: Given the emerging Turkish quality and policy risks, selectively exploring offers from Georgia, Azerbaijan, Chile, the US and others can reduce origin concentration, even when headline prices from these sources currently sit at a premium.

3‑Day Price Indication

Over the next three trading days, prices are expected to remain broadly stable to slightly weak on the main hazelnut exchanges and physical markets, as weak short-term demand and ongoing sales pressure from quality-challenged lots continue to cap any immediate rebound. FOB Turkey indications for conventional kernels and processed products should hover close to current levels, while DAP Central Europe offers may see only marginal further slippage. Any stronger upward impulse is more likely later in the season, when the market gains clearer visibility on TMO’s release strategy and the real volume of merchantable, high-grade kernels.