W11 Hazelnut Update: Soaring Prices Despite Export Decline in Turkish Hazelnuts and Competition Concerns Amidst Inflation

Published 2024년 3월 22일

In W11 in the hazelnut landscape, Türkiye’s food inflation crisis, reflected in a staggering 126% YoY surge in hazelnut prices, highlights the country's struggle with soaring food costs. This inflationary pressure impacts consumer affordability, driven mainly by high global demand. Additionally, the Turkish hazelnut market faces scrutiny over pricing practices, with an investigation into alleged monopolistic behavior by Italian hazelnut giant Ferrero. Ferrero's commitments to address competitive concerns, including adhering to hazelnut purchase prices set by the Turkish Grain Board, are expected to foster increased competition and a more balanced market environment.

Türkiye Grapples with Soaring Food Inflation, Hazelnuts Among Hardest Hit

Feb-24 data from the Union of Turkish Chambers of Agriculture (TZOB) revealed a significant surge in food inflation within the country. Turkish Hazelnuts are included in the top 10 food products experiencing the steepest price increase of 126% year-on-year (YoY) over the past year. TZOB's report highlights significant price increases across various food categories, including dried fruits (figs, apricots), vegetables, olive oil, lamb, and apples. These products witnessed price hikes ranging from 110% to 228% YoY.

In Ordu, the price of shelled hazelnuts per kilogram (kg) has more than doubled, rising from USD 3.10 per kilogram (TRY 55/kg) in Jan-23 to USD 6.80/kg (TRY 120/kg) as of March 17, 2024. Türkiye's food sector is currently grappling with exceptionally high inflation, significantly impacting consumer affordability mainly attributed to the high demand from the markets worldwide.

Competition Concerns and Price Setting in Light of Export Trends in the Turkish Hazelnut Market

The Turkish hazelnut market faces scrutiny regarding its pricing structure and potential dominance by certain players and their price influence. Türkiye holds a dominant position in the global hazelnut market, accounting for approximately 62% of the global production and 61% of global exports. Initiated in 2023, the recent investigation by the Turkish Competition Authority (TCA) concerning Italian hazelnut company Ferrero focused on allegations of monopolistic practices by Ferrero within the Turkish hazelnut market. Concerns centered around alleged price manipulation and exceeding purchasing capacity for shelled hazelnuts.

The investigation concluded with Ferrero making commitments that addressed the TCA's competitive concerns, leading to the closure of the case. These commitments include abstaining from purchasing hazelnuts over the capacity of Ferrero's factories in Türkiye and accepting the hazelnut purchase price announced by the Turkish Grain Board (TMO).

Industry representatives, such as the Altınordu Chamber of Agriculture President, anticipate these commitments to significantly impact the Turkish hazelnut sector. The expectation is that increased competition will be fostered, potentially breaking a perceived monopoly and leading to a more balanced market environment.