Hazelnut cream prices ignite a commercial war in Brazil

Value Added Hazelnut

Brazil

Market & Price Trends

Caio Alves

Published Feb 4, 2022

The 20/21 season was marked by price readjustments when major players in the EU advised a 25% increase to apply on 21 January. It eventually led buyers with private label developments to rush on booking containers and advanced programmed stocks before the new pricing. However, that measure was quickly overthrown in February, one month later, due to the Brazilian national industry competition, of which it started its operations within that same month. Despite the sourcing costs to be tight and benchmarked to the same producing markets the EU processors buy their feedstock, the industry in Brazil opted for flat and negative margins to beat the competition, averaging prices at USD 2.4 per kg, and bringing the industry in EU one more reason to rebound on the pricing decision. Notwithstanding, the Turkish origin managed good offers to Brazil in November, taking the upper hand due to good crop yields, but it couldn't sustain for long. More recently, prices soared further, pressured by labor cost raises and country inflation, with higher demand for Turkish produce.

In the meantime, uncertainties remain as the new crop in Italy and Turkey develop. Italy is expecting a proper amount of rainfall to come by soon, as it has seen none in the last one month and a half, and it can easily become an issue up ahead if it doesn't. Also, energy prices went up, and risks still surround the continent with the Russia-Ukraine situation. Depending on how Brazil manages hazelnut cream stocks, it can inflict a year change of pace for the 2022 campaign.