Looming Start of Georgian Hazelnut in MY 2022/23

Published 2022년 8월 30일

The Georgian hazelnut market has shown a downward price trend since the beginning of 2022. Export prices for Georgian hazelnut decreased by 25% YoY to USD 4.5/kg FOB, and wholesale prices of Georgian hazelnut dropped by 25% YoY to USD 3/kg in mid-August 2022. Decreased prices were mainly due to low-quality products. Other reasons behind the bearish sentiment are the forecast of bumper hazelnut crops in Turkey in MY 2022/23 and weak demand in the EU market.

Export prices for Georgian hazelnut in July 2022 have been reduced to USD 4.5/kg FOB, which was 25% lower compared to July 2021. Tridge’s wholesale price of hazelnut in Georgia also reflected a similar downward trend in mid-August 2022 to USD 3/kg, which was also a 25% decrease YoY. The price drop was driven by higher production but lower quality, affecting the profitability of Georgian hazelnut.

Source: Trademap

Georgia is the 5th largest hazelnut exporter in the global market, amounting to 16,074 mt worth USD 94.62 million in 2021. Georgian hazelnut exports have risen steadily in recent years after the fall in 2018, which was caused by the brown marmorated stink bug invasion. Hazelnut exports hit a record in 2021, driven by demand from Italy, which lacked its supplies for processing in the first half of the season 2021. Georgian hazelnut output nevertheless hit a record in 2021/22 due to new trees bearing their first harvest. It is reported that Georgian hazelnut production is forecast to increase by 7% YoY to 60,000 mt in MY 2022/23.

However, pressure on its exports has grown due to quality issues - the EU has reported 29 rejections on food safety. All rejections in 2021/22 were caused by the high levels of aflatoxins. Heavy rains are attributed to poor quality during the harvesting period, and many Georgian farmers face difficulty drying the nuts properly.

The Georgian hazelnut season for 2021/22 ends in July, and the following season starts in August. Given the current hazelnut market situation, the 2022/23 season will likely be challenging. There are many carrying stocks of hazelnuts in the global market. Turkey, the largest exporter and producer of hazelnut estimated that the production of hazelnut to increase by 12% YoY to 765,287 mt in 2022/23. Turkey exported 86,083 mt of hazelnut worth USD 450.5 million in H1 of 2022, an increase of 3.5% YoY in volume but a decrease by 23.1% YoY in value.

There are significant hazelnut stocks in the Turkish and Georgian markets, which push the global hazelnut prices down. Inflation is also high in the EU as major importers of hazelnut and energy costs have risen due to the Russia - Ukraine war, leading to weaker demand, which will negatively affect the prices of Georgian hazelnut shortly. Due to the oversupply of hazelnut, Georgia potentially increases the export of hazelnut paste and diversifies other alternative markets. It is reported that Georgian hazelnut paste export increased by 5% YoY to 1,473 mt, and Kazakhstan imported 309 mt of Georgian hazelnut paste, up 79% YoY in H1 of 2022.