Turkish Hazelnut Raw Material Prices Begin to Consolidate

After Turkish hazelnut raw material prices had risen significantly in the last two weeks, prices remained constant this week. However, we could observe that the export price lists were now adjusted to the new market conditions. Presumably, some exporters were not sure whether the rise in prices was just a temporary phenomenon or whether it would be permanent. That is why we are seeing significantly higher prices this week than the previous week. It is also interesting that the offers for natural cores are now closer together again, as they have been recently, although the outliers continue to exist.

Prices could fall?

There are a few voices in the market that say that prices could fall again somewhat after the turn of the year, as the TMO will then stop its purchases. However, we do not think this is realistic. In the free market, we are now at the same level as the TMO’s purchase bid and the talks with the farmers indicate that the asking price will be at least 60 TRY/kg. (current market price approx. 51.5 TRY/kg). The farmers who are still holding goods are presumably not dependent on liquidity and can easily hold the goods for another few months. Since there is hardly any other commodity flowing into the market, we see the chance of falling raw material prices as rather small.

Some exporters have also expected the TMO to release approx. 23,000 mt of kernels from the 2021 harvest into the market at favourable prices (the purchase price of the TMO was approx. 26.5 TRY/kg). Presumably, however, the TMO will give these to Fiskobirlik. It remains to be seen at what price this will be done and whether Fiskobirlik will export or support the local market. However, relief for exporters is not to be expected.

Good deals in domestic market

In terms of exports, there have been a few smaller enquiries and individual deals. However, we are hearing about good deals in the domestic market and the current export figures are also above expectations, so the mood among exporters is not as gloomy as it has been recently. Therefore, we eagerly await December’s export figures to get the first forecast on expected exports. Previously, exports were expected to be significantly lower, but now the figures are much more optimistic again, at 300,000 mt.

Concerning developments in the foreign exchange markets, there is little to report. By its standards, the Turkish lira is relatively stable against the euro and the US dollar. However, further development remains uncertain. All in all, the situation remains that commodity prices have an upward tendency, the exchange rate remains unpredictable and buyers do not want to accept the increased prices, although the level is still within the normal range.

Bullet points

• Raw material prices are constant compared to the previous week, export price lists have now mostly been adjusted to the new price situation.
• Export demand is low, but domestic demand is very good.
• Good export figures in recent weeks increase exporters’ confidence for the season.
• The Turkish lira is holding steady with correspondingly small fluctuations to which the market hardly reacts.
• The TMO continues its purchases unperturbed until the end of the year.
• Price lists are becoming somewhat more homogeneous, but outliers remain.

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