Global Hazelnut Market Update – February 2025
Hazelnut Market Remains Firm Amid Supply Constraints
The hazelnut market continues to show strength, with prices on an upward trend. Market participants anticipate that the largest global buyer will soon begin sourcing at higher price levels, further supporting the firm pricing environment. While a temporary relief was observed when Turkey’s TMO (Turkish Grain Board) released 22,000 metric tons of hazelnut stocks, the entire quantity was sold within a single trading day. This rapid absorption of supply underscores the tight liquidity in the open market and suggests that several exporters still need to cover their short positions.
Prices have increased from the 250-260 TL/kg range to 275-280 TL/kg, despite the depreciation of the Turkish lira (TL) below 36 TL/USD. The currency’s weakness has not been enough to offset the overall price surge, indicating that supply pressures continue to outweigh currency-driven cost adjustments.
Global Demand Trends & Market Activity
Overall demand for hazelnuts remains steady, despite some fluctuations in tender volumes compared to last season. Many large buyers, including leading confectionery brands, have already secured their supply requirements for the season. However, demand from private-label brands, retail buyers, and small to mid-sized confectionery manufacturers is expected to remain active, providing continued market support.
Export volumes for the current season are 7-8% higher than the previous year, with total exports reaching 168,000 metric tons, up from 152,000 metric tons at this point last year. This growth is primarily attributed to the largest global buyer being more active in the market, though it also suggests a gradual recovery in European demand.
Despite the steady demand, there are concerns about long-term market stability. Many confectionery producers report stable rather than increasing demand, especially given rising ingredient costs for cocoa and sugar. While hazelnut consumption remains resilient, the market lacks strong indicators of future demand growth.
Supply & Pricing Dynamics
A key factor influencing the market is the quality gap within this season’s harvest. Many farmers are holding onto high-quality hazelnuts, expecting better prices later in the season. However, there is an oversupply of lower-quality hazelnuts, which has resulted in a significant price differential between premium and substandard grades.
Additionally, Turkey’s high-interest rate environment (approaching 50%) has dampened the ability of traders to carry and hold inventory, leading to a cautious approach in stock management. These financial pressures could influence short-term pricing trends, as market participants prioritize liquidity over speculative storage.
Meanwhile, TMO is expected to continue releasing additional stocks, which may limit further price increases. While the hazelnut market remains firm for now, continued government stock sales could introduce price stability by ensuring that additional supply reaches the market.
Market Outlook: Key Factors to Watch
Factors Supporting Price Increases
• The largest global buyer is expected to begin sourcing soon, likely supporting price levels.
• Turkish hazelnut exports have outperformed the past two seasons, signaling strong market engagement.
• Farmers are holding onto high-quality stock, limiting premium-grade availability and adding upward pressure on prices.
Factors That Could Limit Price Growth
• Long-term demand appears stable rather than growing, with most large buyers already covered for the season.
• A surplus of lower-quality hazelnuts is creating a significant price gap between grades.
• High local interest rates (nearly 50%) are discouraging traders from holding large inventories.
• TMO’s continued stock releases will help supply the market, potentially capping price increases.
Conclusion
The hazelnut market remains firm, with supply constraints and steady demand supporting prices. However, uncertainties persist regarding the impact of TMO stock releases, quality differentials, and financial constraints on traders. While short-term prices may remain elevated, the market’s long-term trajectory will depend on how supply and demand evolve in the coming months.
With the largest buyer set to enter the market and European demand showing signs of recovery, the next few weeks will be critical in determining future price movements. Market participants will continue monitoring government stock sales, exporter activity, and the evolving global demand landscape.
