Hazelnuts: chaos persists
Mundus Agri. In view of unsustainable prices, TMO rumors and panic buying chaos is set to persist in Turkey’s hazelnut market.
Panic drives market
Although the lawsuit against Ferrero initially gained a lot of attention and the market giant is presently purchasing less, no further developments have emerged so far. While the common consensus is that buyers have to tighten their purses this year and ample hazelnuts supplies are available, events have toppled expectations in recent weeks. Not only did Turkey’s Competition Board approve an investigation against Ferrero, which is still pending, but rumours also persist that the TMO has purchased less than the officially claimed 200,000 mt of in shells. Employees working for the TMO also imply that the state-run organisation has only bought around 160,000 mt.
Prices have, however, continued to rise for multiple reasons. Issue is that the sudden onset of domestic demand for New Year took the market by surprise. Since many growers either held back or preferably sold to the TMO, several cracking facilities stopped operating, which limited supplies and prompted demand to drive up prices. Most buyers had. However, anticipated prices to drop and jumped into action, which added fuel to the fire. To make matters worse, some large industrial buyers also entered the market searching for raw hazelnuts size 13-15 mm and 14-16 mm. Sellers are taking advantage of the situation, and several suppliers have raised their prices.
New crop to turn tables
These prices are, however, far from sustainable. Recent export figures show that international demand has declined, and next year’s crop also has to be factored in. Turkey shipped 98,337 mt of hazelnuts worth USD 553 million overseas between 01 September and 04 December. This is 19% down on the 120,848 registered in the same period last year and even 28% down on the USD 768 million generated last year. Weekly exports recently ranged at 9,525 mt worth USD 55,008.
Prices will, in other words, have to come down at some point, especially if conditions for next year’s crop remain good. Growers report that the shrubs are healthy and that the number of male flowers is satisfactory at present. Pollination will prove decisive in December and January as well as any possible frost damages, which may occur well into April. If prospects continue to be good and the TMO eventually has to sell their stocks to make space for the new crop, market prices will certainly decline.