In contrast to many other commodities, hazelnut kernels’ export prices (due to exchange rates) are currently cheaper than last year. Nevertheless, buyers cannot bring themselves to cover for later periods. Due to the worldwide increase in supply compared to the previous year and the downward forecast trend of the Turkish lira, buyers are hoping that prices will continue to fall. Producers, on the other hand, are finding it difficult to weigh exchange rate and commodity price developments. Due to the different opinions on this, we continue to see a very mixed price level.
Concerning raw materials, it remains to be said that there are hardly any significant free quantities left on the open market. It is estimated that about 20,000 – 40,000 mt are still in the hands of farmers and crackers and about 34,000 mt are still in the inventory of the TMO. The remaining quantity is already in the exporters’ stock.
Currently, raw material prices are quoted between 42 – 44 TRY/kg. The TMO has not yet been able to sell any significant quantities from the last tender, except for the Giresunder variety. The market seems not yet ready to pay the 44 TRY/kg called for. In discussions with farmers, the expectation of the TMO purchase price now appears to be settling towards a price around 50 TRY/kg. A level between 45 – 50 TRY/kg is also considered realistic. It is, therefore, only a question of time until the market will buy the commodity under these conditions because why pay more later? However, we assume that the market price will settle at least 2 TRY/kg below the TMO price, as it has done in recent years. However, this also depends on what the market leader will offer.
Currently, we see that most exporters are still asking for a premium for the 2022 harvest, but this is becoming increasingly lower as there is parallel speculation on the exchange rate development. Especially the latest statements by the president regarding possible cuts in the key interest rate could lead to further depreciation. The meeting of the Monetary Policy Committee of the Turkish Central Bank scheduled for the end of next week is therefore eagerly awaited.
So far, there have been hardly any offers from alternative origins such as Georgia, Azerbaijan or Italy. The only reports are that they are looking forward to the coming season. However, they want to wait and see how Türkiye positions itself and then react accordingly. We expect attractive prices, especially of Georgian origin.
There ae three months left in the season, but most market participants have already finished. Therefore, we expect a quiet market with cautious buyers in the coming weeks.
Bullet points
- Export and commodity prices are stable compared to the previous week.
- Buyers exercise restraint, hardly any interest in long-term covers
- Scenario for the eventual purchase price of TMO is now revised upwards in exporters’ internal models.
- Market (sellers and buyers) expect further weakness of the Turkish lira against the euro and the US dollar.
- Seller market remains very inhomogeneous.