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Hazelnuts: traders have their suspicions

January 25, 2022 at 12:22 PM , Der AUDITOR
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ORDU. As the Turkish lira continues to firm against the US dollar and the euro not all hazelnut traders are convinced that the financial turmoil witnessed in recent months is over. Although Turkey’s central bank left interest rates firm at 14% on Thursday and Finance Minister Nureddin Nebati assured economists on Saturday that inflation will range lower than expected in the next few months, a high degree of uncertainty remains.

Potential for conflict remains

As Reuters reports Nebati stated that inflation will rise by around 40% over the next three months, which is lower than the 50% most analysts are reckoning with in the next six months. He is also confident that inflation may drop below 30% by the end of the year. According to Nebati lira deposits have, in addition, climbed to TRY 184 billion (USD 13.7 billion) due to President Recep Tayyip Erdoğan’s December scheme, which compensates depositors for losses. The government is keen to cap inflation to single digits by the time elections are to be held in mid-2023.

Reassuring as these promises sound, scepticism prevails. With living costs rising pressure is mounting on Erdoğan and his popularity is falling. The currency crisis, which prompted the lira to lose 44% in value last year, coupled with Erdoğan’s unorthodox monetary policy is also not exactly encouraging market confidence. Turkey has recently, in addition, swapped USD 5 billion with the United Arab Emirates in a deal that lends badly needed support to the lira but undermines the country’s economic independence. The central bank’s quarterly inflation report, which will be issued on Thursday, will attract additional attention. As Turkey has supplied Ukraine with drones and refuses to liberate the activist and philanthropist Osman Kavala relations with Russia and the EU are, moreover, strained. A high potential for conflict and financial turmoil, therefore, remains.

Price gaps start to close

Businesses are, moreover, anything but happy with the fact that they currently have to swap around 25% of their export revenues into lira, which is also hard for the suppliers in the hazelnut market. Trading, however, remains rather subdued, which is normal for this time of the year. The TMO should, however, announce a selling price in February. Farmers state that the shrubs are in a similar condition as last year. Analysts reckon with the first unofficial production estimates in March. While farmgate prices have declined a bit, the export prices are relatively firm as the lira is stable. Traders report that price gaps are closing and that the market is more homogeneous.

Hazelnuts, Turkey

Size

EUR/kg

USD/kg

Natural, 11-13 mm

5.37

6.08

Roasted, diced, 2-4 mm

5.96

6.75

Roasted, meal, 0-2 mm

5.61

6.35

Roasted, paste

5.26

5,95

Organic, raw, 11-13 mm

6.07

6,87

DAP Central Europe

Exports 19% up

Exports have, nevertheless, performed well. Turkey’s hazelnut exports climbed by 19% in 2021. While overseas shipments reached 334,370 mt worth USD 2.26 billion in 2021, the export value climbed by a more moderate 16% on the 280.924 mt worth USD 1,94 billion shipped overseas in 2020. Germany has remained the most important export destination for Turkey, followed by Italy and France. Turkey also shipped 158,465 mt worth USD 981 million in the first four months of the current season, which started in September. This is nearly 50% up in terms of volume on the 106,092 mt shipped in the same period in 2020/2021 and 34% up in terms of value on the USD 729 million generated between September and December 2020.

Hazelnut exports, Turkey in mt

Destination

2021

2020

Diff

Germany

82,657

67,440

+22%

Italy

76,542

65,434

+17%

France

24,025

19,326

+24%

Poland

15,306

12,022

+27%

Netherlands

12,325

10,989

+12%

China

11,055

6,916

+60%

Austria

10,873

10,244

+6%

Switzerland

9,720

9,396

+3%

Spain

8,428

7,358

+14%

Belgium

8,232

7,808

+5%

Others

75,207

63,991

+17%

Total

334,370

280,924

+19%

KiB Black Sea Exporters’ Association, 01/01-31/12

 

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