Türkiye’s Hazelnut Production Estimates Rise and so does the Price Volatility

Published 2022년 11월 9일

Türkiye, the world's largest hazelnut producer and exporter, is expected to produce 765.2 thousand mt of hazelnuts in the MY 2020-23, a YoY increase of 12%. Improvements in agro-climatic conditions are the primary reasons behind the increase in production. This season there is a large difference between the Turkish Grain Board’s (TMO) procurement price and the free market. Traders are concerned that the prices will decrease even more when the TMO concludes its hazelnut purchase on December 31. There is a need for price intervention so that the traders continue to generate profits from selling hazelnuts in the free market.

Hazelnuts are among the most popular, albeit expensive, nuts across the world due to their glorious use in sweet and savoury dishes. According to Report Linker, the global hazelnut market could grow by nearly USD 2.5 billion between 2022 and 2026 and will be led by the leading producer, Türkiye. The country is the world's largest hazelnut producer and exporter, covering roughly 70% and 82% of the world's production and export, respectively. Based on the data released by the Turkish Ministry of Agriculture and Forestry, it is expected that the country will produce 765.5 thousand mt of hazelnuts in the 2022–2023 MY which is much higher than the first estimate of 705 thousand mt. This is a 12% increase from last year’s production and the second-highest crop on record. Improvements in agro-climatic conditions in the main hazelnut regions and an increase in the area under hazelnuts are the primary reasons behind the increase in hazelnut production. Most of the hazelnuts in Türkiye come from the Ordu province, which is forecast to produce 240.6 thousand mt (34% of the total production).

Source: Turkish Statistical Insitute (Turkstat).

One of the main players in the Turkish hazelnut market is the Turkish Grain Board (TMO) which aims to stabilize the domestic market. The TMO publishes a best price at which it is willing to buy hazelnuts without the objective of profit maximization and buys the produce from sellers who are willing to sell at the TMO's price. As of November, TMO has procured 150 thousand mt in-shell hazelnuts and the purchases are going to end by 31 December 2022. Apart from TMO, farmers are free to sell their nuts to the highest bidder in the free market if they get better prices. However, this season the free market does not seem to be a very attractive option as the higher supply of hazelnuts in the upcoming season has resulted in lower prices in the free market. Gokce Yayimli, Senior Manager at Tridge, says that the TMO announced their purchase price of hazelnuts on August 25 with a yield ratio of 50% for USD 2.79/kg. On the other hand, the purchase price of the hazelnut from the Sakarya region in W43 from private traders or the free market remained considerably low at USD 2.31/kg.

High volatility and devaluation of the domestic currency have also pushed prices down in the free market. The producers and traders are looking forward to price increases to generate larger profits but this might not be the case once TMO stops purchasing the hazelnuts at the bid prices. The prices in the free market might rise in the coming months, but they will not reach the desired levels. Overall, the outlook for the Turkish hazelnut market remains uncertain with ample supply in the market and reasonable price quotes by the TMO. The traders should focus on selling as much stock as possible to TMO until 31st December 2022, after which they will have to compete in the free market. There is a need for timely and appropriate intervention to balance the prices.