Activity in hazelnut market is still very high. Impressive weekly export figures and big demand from Europe and Russia, especially for the late deliveries, no doubt effecting the prices negatively. Last price expectation in Turkish internal market around 18 TRY/kg in-shell for December seems very real, since from Monday Giresun variety hazelnut in-shell started to be offered at 18 TRY/kg. Ordu variety at 17 TRY/kg in-shell.
Let me update you with some officially announced datas:
* Export between 01.09.2019-03.11.2019 – 102 148,9 tons/kernel
Crop 2016/2017 – 862,3 kg
Crop 2018 – 5 706,6 kg
Crop 2019 – 95 580 kg ( 56,21% higher than same period in 2018/2019)
* Hazelnuts purchased from farmers in August/October – 312 021 210 kg In-Shell (All officially registered deals, includes traders, factories, cooperatives and TMO).
* Last news regarding quantities in TMO was on 01.10.2019, where says that they paid for purchased goods (latest in 15 days) at total 414 mln Turkish Lira ( basic calculation – 414 mln / 16,5 TRY (minimum price) = 25k tons ) (TMO link)
*In October (01.10.2019-31.10.2019) TMO Sakarya office bought 4 130 248 kg of In-Shell hazelnuts (Sakarya Exchange Data – page 7) – Unfortunately not all Exchanges publishing their datas in such transparence way. Thats why we can not know exact stock of TMO offices in other cities.
* Other news saying that TMO buying at 33 different locations and warehouse capacity is 200k tons (TMO link). 150k tons capacity in own warehouses and 50k additionally rented, as they underlined.
The latest appointment for farmers were given for 16.11.2019 and no one know, do they planning to keep buying in late November or December and TMO didn’t announced anything yet (source).
So, what we have at hands:
Forecast : 776k tons in-shell (Giresun Exchange )
Total bought from farmers: -312k tons
Still at farmers’ hands 464k tons
Total bough from farmers: 312k tons
Exported: -191k tons
TMO / Traders / Exporters stock: 121k tons
Comments: Each year Turkey exporting around 250-300k tons kernel basis. If they already exported 95k tons, just 205k tons kernel basis left to catch the maximum export quantity, which equals roughly 410k tons in-shell basis. So, 385k tons is still available for export and in case of TMO will really fill up their warehouses at 200k tons, than we will have the deficit of just 25k tons of raw material.
But since Turkish exporters gained Chineses hazelnut market due China-USA economic war and increased export to EU and Russian market due low crop in Italy, Azerbaijan and Georgia, Turkey probably will break new record of yearly export more than 300k tons kernels basis. No doubt, due demand, TMO will be forced to put some quantities on the market and prices will definitely effect negatively, since TMO planning to sell at least 2 TRY higher, than they purchased the goods.
Of course here are a lot of variables like:
1) Real crop quantity. It could be 800k tons or even 600k tons, that could be an explanation for me why prices going up today.
2) Or as i wrote above Turkey may realise record export quantity (higher than 300k tons),
3) TMO may stop buying when they will reach 150k tons as it was in year 2017 or even less. Then current crop will be enough for current season.
4) And finally weather conditions and situation in hazelnut gardens after winter will give us an idea about new crop.
Situation in Azerbaijani hazelnut market looks stable at the moment. As local exporters started very bad due high prices in local market, now they planning to catch lost volumes in Russian and EU market. Prices starts to be very attractive and very good quality as it was last 3 years.
source: Nizami Emreli