There are major issues with the world’s leading hazelnut producer Turkey. Many EU buyers are now preferring other alternatives, which include Georgia. Competition is getting fiercer in the global market of hazelnuts – the number of large-scale suppliers is increasing. Turkish producers think that a strategy is needed in order to keep the country’s position in international trade. Below EastFruit reports about the developments of hazelnut market based on Mundus-Agri.
“News from Turkey is devastating. Not only did president Recep Tayyip Erdoğan win Sunday’s runoff with a 52% majority, but last week’s International Nut and Dried Fruit Council Congress in London came as a wakeup call for hazelnuts.
This position is, however, starting to come under fire. Suppliers highlight that Turkey has lost much ground in the past ten years. As Turkey’s crop is projected at 810,000 mt the country may still account for 63% of global production in 2023/2024, which is forecast at 1.825 million mt, but other production countries are certainly catching up. While countries other than Turkey produced less than 200,000 mt ten years ago, they have now increased production to 450,000 mt. International competition will certainly become fierce, and suppliers are already feeling the effects. As prices range up to USD 1.000/kg lower in Azerbaijan and Georgia many buyers in Europe, for instance, state that they prefer hazelnuts from here. American hazelnuts are also turning into a satisfying alternative. Suppliers in Turkey know that long-term planning is required to be able to maintain a good position internationally.
Problem, however, is that the market is unhinged from the normal dynamics of supply and demand and Erdoğan’s victory over his rival Kemal Kılıçdaroğlu in Sunday’s runoff spells trouble in this respect. His unorthodox interest rate policies will continue. The Turkish lira already hovered on an all-time low against the US dollar on Monday and a black market for foreign currencies exists now. While banks offer an exchange rate of TRY 20.05 for a US dollar, exchange rate offices are already offering TRY 21.50. Expectation is that exchange rates will climb to TRY 24-25 very soon.
To make matters worse banks have stopped issuing loans and state-run banks are charging high rates for small loans. With the Central Bank reserves at an all-time low, it has become impossible to draw foreign currencies from accounts. Suppliers report that if they want to draw USD 2,000 from their own accounts the bank will make them wait for one week for an appointment with no guarantee that the full amount will be available. Expectation is that the situation will get worse unless a miracle happens and that many businesses will have to file for bankruptcy.”
