Turkish hazelnut exporters adjust their price lists

Contrary to most market participants’ expectations, the TMO already surprised this week by announcing the sale of part of its stock. Next week, the TMO will offer about a quarter of its stock (17,000 mt of hazelnut kernels in the shell of the Levantine variety and 3,000 mt of hazelnut kernels in the shell of the Giresunder variety) for sale on the open market to ensure uninterrupted exports. The sales price was set at 39 TRY/kg. This is basically in line with market expectations. In a first reaction, most exporters adjusted their price list to this level, which led to partly significant price jumps. However, in the course of the week, the level was put into perspective again. Most exporters bought goods at around 34.5 TRY/kg in the last few weeks. This week the market closed at about 36 TRY/kg, which shows that higher prices can be achieved, but not to the full extent and competitive pressure is working.

To be able to classify further development, one has to wait for the events of the coming week. The question is whether the TMO is currently getting the goods offered sold at all or whether the prices and quantities in the free market make this still unattractive. Only for the kernels of the Giresunder variety have we already heard lively interest. Apart from that, exporters have to decide whether they want to buy goods above market price, but with a certain degree of security in terms of quality, or whether they want to wait a little longer. The quality issue, in particular, could still become an issue in the last third of the season, so many are eagerly awaiting the reaction of the market leader.

TMO is influencing the market

Overall, however, the TMO’s reaction can be classified as meaning that it is now actively influencing the market (due to pressure from the market), primarily in favour of the farmers and currently also in favour of the crackers and exporters. Even if there is still a manageable interest in the stocks, the communication of the tender significantly influences the market price. If one assumes that the remaining inventory will continue to be offered in smaller tranches, then further steps towards influencing the market are likely to follow. The market thus remains anything but predictable. The commodity market will continue to be affected by a sum of various unpredictable factors in the coming weeks:

• Demand behaviour (Especially for the 3rd quarter, a lot of business is still pending)
• Harvest estimate for the 2022 crop
• Weather in the coming months (risk of frost)
• Behaviour of the TMO concerning marketing the remaining quantities
• Behaviour of the market leader
• Developments on the foreign exchange market

In addition to the uncertainties on the commodity market, there is also the unpredictable development of the exchange rate. In the coming months, the Turkish central bank will have to manage the feat of fighting inflation on the one hand and satisfying the president’s desire for low-interest rates on the other. A conflict of interests in which the loser is the people. Currently, the Turkish central bank has decided this week to leave the key interest rate unchanged at 14% and thus keep the currency constant. However, the market expects interest rate steps either in one direction or another.

Overall, the buyers’ market reacted quite relaxed to the week’s events. Although there is an increase in inquiries and the number of transactions, one cannot yet speak of a clear revival. The tenor seems to be “wait and see”. The coming weeks will provide further indications, but where the market will go is hardly predictable due to the many possible events. However, it remains to be said that market prices have risen overall, which has been accepted.

bullet points

• TMO releases 20,000 mt of hazelnut kernels for sale at TRY 39/kg.
• Market price rises from 34.5 to 36.0 TRY/kg.
• Market does not react hectically to the price increase and first observes the reactions. However, there is increasing buying interest and also purchases.
• Turkish central bank refrains from further interest rate hikes also this month.
• The Turkish lira thus remains relatively stable over the week.
• Overall, prices have risen by more than 5% compared to the previous week.

Related posts:

Turkey Hazelnuts: Commodity prices are slightly on the upswing again The Commodity Board Turkey Hazelnuts: Has the bottom now been reached at commodity prices? Turkey Hazelnuts: Weather curbs optimism Hazelnuts Turkey: Unfavourable weather conditions continue to cause delays. Hazelnuts: First lots of the 2021 harvest ready for loading Turkey Hazelnuts: State purchase price published and the consequences Hazelnuts Turkey: Erdoğan under political pressure Hazelnut market not important enough Turkish hazelnuts: Now the switch to new crop begins