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Turkish Hazelnut Prices Continue Increasing

Mintec Global
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Over the past weeks, we have seen a rise in Turkish hazelnut prices. The increase comes mainly from purchases by exporters and large crackers. On the one hand, some are still building up positions, on the other hand, open positions are being closed. Especially from the western growing regions, one hears voices claiming that especially the suppliers of the market leader still have to buy in goods to fulfil their contracts and that this is also one of the reasons why the market leader does not yet have all the goods physically in its warehouses as planned. If this is indeed the case, it would mean that the suppliers are now realising losses.

Concerning exports, on the other hand, calm prevails again after last week’s business. Buyers are not willing to make deals after the recent price increases and sellers are not very active either. Therefore, hardly any trade is taking place. The situation is different in the Turkish domestic market. Here there were numerous trades in the course of the week.

In addition to the exporters’ purchases, the TMO is also still active and will remain so until the end of the year. Official figures are not available, but estimate the current stock of the TMO at about 150’000 – 165’000 mt from the 2022 crop and about 23’000 mt from the 2021 crop. This will enable the TMO to pursue some policies in the future. There is already speculation about possible selling prices being at least 60 TRY/kg. Currently, the free market is around 51 TRY/kg.

Turkish Central Bank has lowered the key interest rate

Concerning the foreign exchange market, the Turkish Central Bank has lowered the key interest rate for the fourth time in a row. With the cut from 10.5 to 9.0%, this is again a significant step and even though (statistical) inflation recently reached a new record level of 85.5%. In line with the previous interest rate steps, the foreign exchange market hardly reacted to the change this time either. To put this into perspective, however, it must also be said that the central bank announced that the level now reached was an appropriate level and that this was probably the last interest rate step for the time being.

We expect a few more smaller deals in the next two weeks. The deterrent to price increases is likely to be accepted, as the current outlook is that commodity prices will continue to rise. After that, however, things should calm down again until the end of the year.

Bullet points

  • Commodity prices are up again due to rising demand from local exporters.
  • Export demand slumped again due to the recent price increase.
  • Domestic demand, on the other hand, was good.
  • The Turkish central bank cut the key interest rate for the fourth time in a row to currently 9.0% p.a.
  • The Turkish lira is more volatile than in recent weeks, but there is no discernible trend in one direction.
  • The TMO continues to buy and receive inflows.
  • Extreme differences in the price lists of the individual exporters continue.
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