Currency Inflation & Its Effects on the Industry

Currency inflation can have adverse effects on the economy. If it's a major currency, the shock waves can be felt throughout the globe. But what if the currency in question isn't a superpower but one of an influential country with ties to the Middle East, Asia, and Europe?

In this post, we're going to talk about the currency inflation that has plagued Turkey and what it could mean for the rest of the world.

How Did It All Begin?

Turkey's currency hyperinflation began a few years ago, when the Turkish Lira, normally between 4 and 5 against the US Dollar, took a hit when sanctions were placed on it by then American President Donald Trump.

At the time, we saw one of the most historic peaks of the Turkish Lira as it went from around 4 to the Dollar to 8 against it. However, after some time, the currency was able to stabilize and return to a low 6. The Turkish Lira has not been lower since then.

However, while it could be said that Turkey's 2018 currency hike had something to do with external factors, this time, the situation is different.

The Turkish government wants a cheaper lira now more than ever. However, with their current debacle with interest rates, the currency is soaring against the Dollar. On Thursday, it hit 11.8- the highest in its history.

The Effects on The Nut & Dried Fruit Industry

Industries throughout Turkey are suffering from this currency inflation. It has caused concerns among suppliers that they may end up paying much more in Liras to replace goods.

A competitive currency is good, but an uncertain one can be quite volatile and not favored at all, especially in the long run.

But how does this affect our industry?

Well, as you know, most of the world's hazelnut supply comes from Turkey. Apart from that, Turkey also exports a number of other nuts and dried fruits. While luckily, apart from hazelnuts, most of the harvest season for crops like pistachios is already finished, it is causing quite a bit of issues with shipments and deals.

We're already going through a logistics crisis, causing shipments to be delayed, but with the Lira swinging so unpredictably, most buyers are stirring clear of the market.

While there have been reports of shipments going well, there haven't been any long-term commitments yet because of the uncertainty. We will definitely be updating you as the situation progresses.