Turkish Hazelnuts Price Idea of the TMO Cannot (Yet) Be Implemented

After the significant increase in prices last week, we saw a decline again this week, almost to the previous week’s level. The main reason is that there is still too little demand in the market. Although we are registering an increase in enquiries, the motto of European buyers is still restraint. Exporters are building up their stocks, but the supply of raw material on the open market is still quite good, as farmers have already put a large part of their stocks on the market. According to crackers and traders, a maximum of between 5 – 10% of the nuts are still in the hands of the farmers. However, this is difficult to verify, as the figures of the collection by the local buying centres are always published with a considerable time lag and it is still not entirely clear how large the harvest is. Overall, however, we have seen this week that the market has almost completely ignored the TMO offer. There was only little buying of the stock, and in export, the prices based on the TMO prices could not be realised.

However, the situation should not be taken lightly. On the one hand, it is still expected that the market leader will buy a substantial quantity in March, and if demand from Europe increases again, the tide could quickly turn again. The TMO will most likely announce another tender in March, and market observers expect a higher sales price then. It remains to be seen how the market will react to this then, especially since we will then already be in the period in which a frost could cause significant damage to the bushes. The time for rumours is just coming.

Last week, the first inspections of the plantations and flower counts took place. It is still too early to make a statement but based on the results now available. We are expecting at least an average harvest in 2022.

We have seen a surprisingly stable Turkish lira over the week in terms of the exchange rate. We would have expected a much stronger swing due to the Russia-Ukraine conflict. Therefore, the price changes we have seen this week are mainly due to commodity prices.

We expect the market to pick up slightly in the coming weeks. We anticipate buyers will still cover the remaining demand for the second quarter as uncertainty in the commodity market generally increases again. The prevailing view still seems to be wait and see for the third quarter.

bullet points

• TMO is (so far) still unable to find buyers for the offered commodity. Market price goes back to around 35 TRY/kg due to lack of enforceability of prices in export.
• The Turkish lira is holding surprisingly stable in response to the crisis in Ukraine.
• The first flower count does not indicate an extreme situation for the coming harvest; a harvest in the normal range is expected.
• Buyers are tending to finally cover the demand for the second quarter; with regard to the third quarter, the motto is to continue to wait and watch.

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