Turkish Hazelnut Harvest is now in Full Swing

After the influx of raw materials didn’t want to get going in the last few weeks, we can state this week that we are finally back to the usual operation for this time. So there are currently decent quantities coming into the free market, but also to the TMO. Market observers say that more than 20,000 mt of raw material has already reached the TMO and there are already applications for more than 80,000 mt. It is interesting to note, however, that local traders say that farmers are currently handing over only part of their produce to the local buying centres and are taking a certain part home with them, as they expect higher prices shortly. On a small scale, this is also a hedge against high inflation (the latest figure was 80.2% in August). This trend is also affecting prices. Thus, despite continued low demand and increased supply, commodity prices rose slightly this week. Export price lists, on the other hand, have moved down slightly on average, despite a slightly stronger Turkish lira.

Overall, we view the current development with some concern. Farmers are now starting to build up speculative stocks, traders and crackers are trying to do the same, but very few have the financing to do so. The exporters can show financing and some already have speculative positions. The TMO is also pulling quantities out of the market to make policy. Given the uncertain sales situation in Europe for the coming months, there is a certain danger in this situation. The whole thing will only work out for many if a poor harvest is forecast in the spring and sales remain stable. It is therefore important in the coming weeks and months, on the one hand, to see how sales will develop. One should not forget that most exporters are credit-financed by banks, which are also breathing down their necks. Due to the increased interest rates for foreign currency loans and the gaps in the order books, there is also a big chance that at some point business will be done that is not economically viable. Apart from that, it is important to watch the development of the shrubs from the beginning of the year to be able to classify the expected rumours.

In the coming week, the market leader will probably also start buying natural kernels again. This buying bid is also eagerly awaited and may have an impact on the export price lists. For example, the bid will be the yardstick for some exporters to decide whether they prefer to sell to the market leader at that price or to export (at higher risk). Smaller crackers who cannot do this will probably be able to continue to offer cheaply.

In terms of core size, the first assumption does not seem to be confirmed. This year there are again many large cores, but also more small cores than last year. We, therefore, suspect that the difference between cores of the 9-11 mm and 11-13 mm calibre will again increase somewhat, but that the difference between 11-13 mm and 13-15 mm will remain very small.

Another item for the coming week is the meeting of the Monetary Policy Committee of the Turkish Central Bank. It is eagerly awaited whether another interest rate step will be taken. This too may have an impact on the exchange rate. The coming week thus has potential for certain changes.

bullet points

• Commodity inflow is now at a normal level for seasonal timing
• Demand remains subdued, supply is increasing, yet commodity prices are rising slightly.
• Farmers are holding back some produce to sell later at higher prices.
• Purchasing by the TMO enjoys great interest.
• The purchasing bid of the market leader for natural kernels is expected next week.

Next week, the Central Bank’s monetary policy committee will meet. The outcome is awaited with appropriate excitement.

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