As expected, the trading week started very quietly in Turkish Hazelnut Market. In Türkiye, Ramadan slows down daily activities, and demand has also remained subdued regarding exports. However, we surprisingly registered increased requests from the middle of the week. The industry is now dealing with the remaining coverage of the second and third quarters. This is probably due to the lower price level, as well as voices from some sellers that it is not expected that the level of commodity prices will now fall even further. Further price corrections would then be purely due to exchange rate effects.
Sales of the TMO is expected to start after the election
On the whole, one can agree with the statement. However, there will still be exceptions. The season in Turkish hazelnut market started with a raw material price of TRY 44/kg and peaked at a level of TRY 61/kg. Currently, we are back at about 56.5 TRY/kg. Suppose one considers the excellent buying interest at the last auction of the TMO when large quantities changed hands at 58.5 TRY/kg. In that case, after seven months, there are hardly any cheap stocks left in the market from the beginning of the season, and the sellers will probably not sell below the cost price. There is also hardly any raw material left in the farmers’ stock, so we cannot expect any relief from farmers willing to sell.
We do not expect sales of the TMO until after the election in May, and it may be priced at more than 60 TRY/kg. The upcoming election is eagerly awaited, and the outcome will likely lead to fluctuations in the exchange rate. Whether and how, however, cannot be foreseen, so the purchase decisions are pretty understandable.
EU buyers want a realistic price level
In addition to this trend, we have also seen that some exporters try to keep the market “low” through sales. We suspect that significant European buyers will soon act and therefore want a realistic level at which deals are realistic. According to the current weather forecast, the risk of frost can now be almost ruled out, which is why some sellers are now daring to come out again with offers regarding the 2023 harvest. We see surcharges of 0.20 – 0.60 EUR/kg depending on the provider. Whether this will be attractive enough remains to be seen.
Fasting will end next weekend with the end of the Ramadan feast. For the upcoming celebration tragedies, there was again increased demand for large cores of snack goods in Germany. Therefore, calibration cores 13-15 mm have again become more expensive than 11-13 mm. We expect the difference to narrow again in the coming weeks.
Rumours about the harvest put the market in uncertainty
For the coming week, we expect some more minor inquiries again. However, we assume that little will change in the big trend, the waiting for the election and the harvest estimate. It will be interesting to see whether exporters will continue to keep their prices at a low level, or whether the emerging demand will cause the level to rise again. After the end of Ramadan, rumours about the size of the coming harvest are likely to put the Turkish hazelnut market in uncertainty once again.
In terms of the exchange rate, we continue to see a weak Turkish lira due to the strength of the euro.
Bullet points
Based on raw hazelnut kernels 11-13 mm g/n DDP Central Europe
- The risk of frost can now be almost ruled out for this season.
- Exporters are correcting prices downwards across the board.
- Together with the favorable exchange rate, there are now attractive offers again, of which some buyers can be convinced.
- Next week, due to the holidays in Türkiye (Ramadan feast), fewer active sellers are likely to be expected.
- The Strong Euro provides for one Weak Turkish Lira and thus additional for one Price correction.