The Mintec Benchmark Prices for Turkish hazelnuts (Levant quality, 11/13 mm) delivered on a CFR basis Northwest Europe declined 1% in the four weeks to 18th March, to USD 7.1/kg. The market has been steady in the past couple of weeks but the latest depreciation of the Turkish lira, following the sacking of the Turkish central bank governor, Mr. Naci Agbal, will undoubtably weigh on prices in USD-denominated markets.
The Turkish lira weakened to 7.8 against the dollar on Monday 22nd March, erasing all previous gains since the former central bank’s governor pushed through with a 2% increase in Turkey’s key interest rate. On 18th March, Turkey’s central bank monetary policy committee agreed to lift the one-week repo rate by 200 basis points to 19%, to help stabilise the currency and fight off high domestic inflation.
For the upcoming hazelnut crop, Turkey experienced a relatively mild winter, which is speeding up development in hazelnut orchards, and increases risk of frost damage. Indeed, hazelnut growing areas in the Black Sea region experienced sub-zero temperatures on two occasions, in the second half of February and in March. Opinions on the extent of the frost damage vary and the industry might have to wait until objective estimates are published when the risk of frosts has passed.
In terms of hazelnut exports, Turkey exported 165,700 tonnes of hazelnuts between 1st September 2020 and 7th March 2021, a decrease of 38% y-o-y. The decline is attributed to production gains in other origins as well as the industry stockpiling heavily during the record 2019/20 export season. As buyers contracted large volumes during 2019/20 over pandemic concerns, this contributed to the lack of buying interest in the early months of the current season. Interestingly, Turkish exports picked up in the first two months of 2021, totalling 52,900 tonnes, up 2% y-o-y, as buyers shipped out previously contracted volumes.