Hazelnut Market Update January 2022 Week 4

Even though, after weeks of turmoil, the Turkish Lira remains consistent against the US dollar and the Euro, most hazelnut traders are still sceptical of a financial problem.

They remained convinced that another financial catastrophe might be around the corner, showing the traders' little faith in the market forces. Turkey's central banks left interest rates at 14% last Thursday, and even though the new Finance Minister assured economists on Saturday that inflation will be much lower than expected, there is still plenty of uncertainty.

Nebati says that inflation will be at around 40% over the next month, but most analysts suspect it to be 50%. Still, the Minister is confident that it will drop below 30% by the end of the year. 

The government is keen to cap inflation to single digits by the time elections are held in mid-2023.

 In addition, Turkey has swapped USD 5 billion with the United Arab Emirates in a deal that lends badly needed support to the Lira but undermines the country's economic independence. The central bank's quarterly inflation report will attract additional attention, which will be issued on Thursday. 

Interestingly, businesses are happy that they currently have to swap around 25% of their export revenues into Lira, which is also challenging for the suppliers in the hazelnut market. 

Trading, however, remains relatively undisturbed, which is typical for this time of the year. The TMO hasn't announced selling prices yet, and it is recommended by experts that they should do so in February. We'll let you know as things progress.