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Hazelnuts: currency issues

November 27, 2023 at 10:40 AM , Der AUDITOR
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ORDU. Turkey’s central bank took economists by surprise in hiking the key interest rate by 500 basis points to 40% on Thursday. Hazelnuts are profiting from a strong euro.

Demand at stake

Alarm bells may have been ringing over demand in September, but as it turned out buyers were only observing a soaring market with prices touching TRY 110/kg for in-shell hazelnuts without rushing into decisions. As exporters report demand has been strong since October when prices returned to more normal levels largely driven by Ferrero’s revised offer over TRY 95/kg for in-shell hazelnuts, which helped to reign in manipulations. Opinions are, however, still divided as to the crop size with guesstimates ranging anywhere between an absurdly low 450,000 mt to 700,000 mt.

Demand is still good, especially in the East. In Europe Turkey has, however, lost valuable market shares to other producing countries including Azerbaijan and the USA. Yet, the strong US dollar and euro have played into exporters’ hands as they were able to lower their prices a bit in November. The prices for in-shell hazelnuts in Levant quality are fluctuating at TRY 92-94/kg and natural hazelnut kernels, size 11-13 mm, are trading at EUR 6.49/kg (USD 7.10/kg) DAP Central Europe.

Hazelnuts, Turkey

Type

EUR/kg

USD/kg

Natural, 11-13 mm

6.49

7.10

Natural, 13-15 mm

6.65

7.28

Meal, 0-2 mm

7.20

7.88

Diced, 2-4 mm

6.15

6.73

Paste

4.55

4.98

DAP Central Europe

Shift in economic policy

Although taken by surprise, economists have applauded the central banks decision to raise the key interest rate by 500 basis points to 40%, whereas prior expectations only hinged at 250 basis points. Impression is that the bank is determined to bring the country’s soaring inflation, which stood at 61% in October, under control by issuing the sixth increase in a series of interest rate hikes. The lira has lost 35% against the US dollar since last year and more than 85% of its value in the last five years largely driven by president Recep Tayyip Erdoğan’s unorthodox policies that have left people to struggle with a horrendous cost of living crisis.

 

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