Turkish hazelnut exports are going nowhere, with prices doubling!

According to the agricultural food price report agency Mintec/Expana, certified by the International Organization of Securities Commissions (IOSCO), the largest international regulatory organization, the Turkish hazelnut industry is currently facing severe challenges in this crop season, with rising prices, tight supply, and a bleak export situation being the main issues. Despite earlier expectations that prices would stabilize, the continued rise in costs, coupled with producers and traders holding back their stock, has further exacerbated the supply pressure.

The Turkish Grain Board (TMO) unexpectedly announced its purchase plan earlier in August, setting the purchase price for Giresun grade hazelnuts at 200 Turkish Liras per kilogram (equivalent to 4.83 US dollars), and for Levant grade at 195 Turkish Liras per kilogram (equivalent to 4.71 US dollars). Although the price in Turkish Liras has significantly increased compared to last year, producers generally feel that the current prices still fail to cover inflation and production costs.

Reviewing the recent purchase prices: for the 2024/25 season, TMO purchased Giresun grade hazelnuts at 132 Liras per kilogram, and the previous season's purchase price was 84 Liras (a nearly 60% increase from the 53 Liras purchase price in the 2022/23 season). Currently, domestic prices in Turkey are mainly driven by high inflation and supply constraints.

Since TMO announced the purchase prices, by the third week of September, Expana learned that local prices had surged to 320-350 Liras per kilogram (equivalent to 7.73-8.46 US dollars). Due to insufficient raw material supply, exporters are struggling to fulfill orders, leading to severe export disruptions at the beginning of the new crop season.

Abnormal weather conditions have caused a reduction in Turkish hazelnut production: spring frosts and summer droughts have led to this season's production falling to the lowest point in recent years. In May, the International Nut and Dried Fruit Council (INC) estimated the production at 609,000 tons, a 22% decline from the previous year. Subsequently, some Turkish agencies reduced their production estimates to 520,000 tons, with some sellers and traders believing that the actual production might be even lower. A European trader revealed, "Production could be as low as 400,000 tons, and the proportion of empty shells will increase significantly this year."

Record-high export prices and market fragmentation have exacerbated the industry's difficulties. Facing high costs and increased risks, buyers are reluctant to sign long-term contracts. Meanwhile, due to potential losses and difficulties in sourcing raw materials for existing contracts, most exporters are cautious about accepting new orders. One trader bluntly stated, "Current prices are only theoretical; the market is in a state of having a price but no market. Many suppliers are unwilling to fulfill contracts at the earlier lower prices."

Over the past four weeks, as of September 18, Expana's benchmark platform recorded a 41% surge in the price of Turkish 11/13 Levant grade hazelnut kernels, reaching 1,700 US dollars per hundred kilograms, a 121% year-on-year increase.

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