Hazelnut Market Update November 2021

For this month's hazelnut report, we would like to start by stating that the demand for the crop is high. However, there is one crucial factor that is affecting the market: the Turkish Lira.

Since most of the world's hazelnuts grow in Turkey, with companies investing heavily in sustainable farming, much of the world turns to Turkey to supply hazelnuts. Unfortunately, the instability of the Turkish Lira is not making things easy for anyone in the domestic market.

Companies are in Buying Position

Companies have become well aware that once the TMO reaches a high stock (around 100.000+ MT), they will have to buy raw materials at higher prices than the actual market prices for supply. This is not sitting well for most companies, pushing them into buying a position when they should be selling.

This position has prevented prices from being lowered in the free market. However, the chances of the price rapidly accelerating upwards is also quite low this year due to the drying problems faced by farmers and quality issues in hazelnuts.

What does this Mean for the Needs of 2022?

For the market to operate properly, there will need to be a period where short-term needs are met until the TMOreaches its goals. It seems like a good time to meet the needs of 2022, but this solely lies with the FED.

After all, there is yet to be a decision made on interest rates by the FED, which will set the criterion for 2022.

If the FED decides to reduce bond purchases (as rumors indicate), then the currencies of developing countries will depreciate once more. The Turkish Lira may lose value again, which will be used to meet the needs of 2022.