Support for tea price notably impacts hazelnut market

The positive trend in trading activities observed in recent weeks continued throughout the week. [swpm_protected visible_to=”logged_in_users_only” custom_msg=’This content is for members only. Please login or sign up now.’] Although raw nut prices started to climb as was expected, this did not put a dent on trading but rather prompted attention to shift somewhat again from the next to the current crop.

President Erdogan himself announced this week that this year’s national bid price for fresh tea grown in the Black Sea Region (eastern coast in the Rize Province) will range 18% higher than last year. The crop is, however, similar in size to last year. If this hike is applied to the hazelnut market (inflationary adjustment) prices will rise. As the TMO recently offered TRY 21.5/kg for in-shells prices would at least range as high as TRY 25/kg if the 18% are applied. The base price for raw hazelnut kernels would thereby range more than EUR 0.50/kg higher. Such a price surge has, however, so far failed to prevail in the market. In addition, it should be noted that the market leader’s bid will range lower than the TMO’s and that certain volumes will be sidestepped from the TMO as has been the case in the past. Many market players also reckon that the Turkish lira will continue to lose ground meaning that surcharges are still kept within a limit.

The raw nut market swiftly responded to this news with a notable hike in prices also for the current crop. Prices thereby nearly rose by 20% but failed to persist as there are enough farmers at present who are willing to sell at lower rates. The week, nevertheless, ended with domestic prices for raw hazelnut kernels size 11-13 mm ranging at TRY 44/kg (previous week TRY 42/kg). The production estimate for hazelnut kernels will be issued at the online INC conference on Tuesday evening. According to information recently available the crop volume to be issued should just range above 800,000 mt. Some changes have, however, occurred at short notice in recent years. Apart from Ordu Province, where local frost damages have been observed, prospects are highly encouraging in all parts of the Black Sea Coast. We are now hoping for an equally good quality.

Little is to be reported on exchange rates this week. The Turkish lira is, hovering at around TRY 10.10/EUR with fluctuations of c. 1%. Apart from a meeting between Turkey’s and the US president, which is to take place in June, there still is no sign of a fast recovery. Ministers are rather increasingly confronted with allegations of bribery and discontent with the economic, social and pandemic situation is on the rise.

We reckon that trading will rather be more subdued in the next few weeks. As deals have been concluded to some degree the market should be prepared to wait.

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