The global hazelnut market is acting cautiously once again. Production in the biggest producer Turkey is reported to be lower than expected. The whole market is waiting for the leading company Ferrero to announce its own purchase bid. EastFruit provides an article by Commodity Information Service CMB which expands on the current affairs in the hazelnut market:
“The first significant volumes are now entering the hazelnut market. However, the mood is not good. The farmers are dissatisfied with the price, the quantity, as well as the quality. The traders and crackers mainly complain about the quality, but at the moment they cannot complain about a lack of sales and the exporters have increasing respect for the coming season. It is still too early to make a definite statement, but the quality and the so-far reported lower yield currently lead to the fact that the signs point to rising raw material prices. Harvesting in the higher altitudes has now also begun. For the coming week, we expect the first feedback regarding these regions.
Hazelnut market waits bid of the leader
On Tuesday, the hazelnut market leader is expected to announce its purchase bid. Many market participants expect the bid to be around 80 TRY/kg. Currently, the TMO is receiving a lot of interest, but not in the Giresun region, where the price in the free market is already close to the TMO’s bid. If the market leader wants to buy large quantities quickly, the bid must not be too far away from the TMO price, especially since the other exporters are currently also active as buyers in the market. So far, the TMO already has applications for about 50,000 mt. This is less than expected.
The question is how to interpret it. Are the farmers hoping for higher prices in the free market, or do they want to sell the commodity quickly in the free market? The bid of the market leader will therefore also give an indication of how the leader views the market.
Suppliers more cautious
Overall, we have seen this week that many suppliers are pulling back and acting more cautiously, or calling higher prices. The price range of the offers has now become much smaller. Also, there are already first warning voices in the market talking about whether all the contracts concluded in the run-up to the harvest will be fulfilled. Despite all the bad moods, you shouldn’t let yourself go crazy. Currently, we are only at the beginning of the season and many factors are not yet clear. (Harvest quantity, quality of the total harvest, the behavior of the farmers, the strategy of the market leader, core size distribution, the medium-term reaction of the buyers to the price increases, etc.).
It is recommended to observe the market well in the coming days. Most analysis predicts that Türkiye will try to keep its exchange rate stable, so betting on exchange rate-driven price declines is currently quite risky. Accordingly, the development of the commodity market becomes more important again. Relatively, however, it should be noted that the issue of financing costs massively affects the calculation and encourages many sellers to leave positions open.
- Negative reports about quality and quantity make sellers cautious.
- The market leader will probably announce its purchase bid on Tuesday.
- TMO is receiving good demand so far, but registrations are not yet as high as expected.
- The behavior of farmers is not yet clear.
- Offers are becoming more homogeneous, there are hardly any outliers at the bottom
- European trade shows good demand for prompt delivery, but origin demand remains weak.
- The market should be well monitored in the near future.”
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