Monday, March 22, 2010

Hazelnut prices reach a peak

ISTANBUL – Daily News with wiresSunday, March 21, 2010The scarcity of hazelnuts in the Turkish market reportedly raises prices. Weather conditions are expected to shape the price of hazelnuts for the upcoming period, say sector representatives. Also, the advent of high hazelnut prices brings forth new rival countries, according to the Hazelnut Promotion Group
Hazelnut prices in Turkey, which are determined by free market conditions according to the new strategy, have recently reached a record level for the year.
Giresun quality fat hazelnut, which was traded at 3.30 Turkish Liras per kilogram in September, is now going for 4.90 liras, Anatolia News Agency reported Friday. Levant quality hazelnuts, which have a lower level of fat than the Giresun quality hazelnuts but a higher level of fat than those grown in the other countries, rose from 3.20 liras to 4.70 liras. The Turkish Grain Board has not made purchases this year.
The prices have reportedly started to rise with the impact of the scarcity of hazelnuts in the market. The prices are expected to rise further with claims that the unexpected snow in March may result in a possible frost, reducing the yield.
The hazelnut yield is low this year, said Mehmet Cirav, president of the assembly at the Trabzon Commodity Exchange in the Black Sea region. Prices have reached the peak level of this season because producers have scarce product at hand these months, he said.
Noting that the producers with hazelnuts in stock do not want to give their products to the market while prices are rising, Cirav said: “In such a situation, the producers have greater expectations. And the prices increase.”
The snow in Trabzon this month has not affected the hazelnut supply at present, Cirav said. “But it may affect the prices in a speculative way. Hazelnuts may be damaged in case of agricultural frost during the night. The rise in current prices stems from the scarcity of the hazelnuts that producers have now.”
Weather impact
Özer Akbaşlı, chairman of the agricultural chamber in the Black Sea city of Giresun, also expressed the scarcity of hazelnuts in the market, adding that the Turkish Grain Board has also not put its hazelnuts on the market. “Therefore, the prices have risen. Farmers still have hazelnuts.”
Merchants are raising prices to obtain hazelnuts, according to Cirav. “We already expected this rise. In the upcoming days, the prices may rise further due to the negative weather conditions experienced in the east and west of the Black Sea. I do not want to make a prediction but I expect the prices to increase further to a certain degree.”
A recent front in the region has damaged hazelnut fields at an altitude of 500 and 750 meters, Akbaşlı said, also referring to snow. “The Meteorological Service has issued a warning about agricultural frost for Giresun, Ordu and Trabzon. A problem in these regions may significantly affect the yield for next year.”
Akbaşlı said it is not possible to predict at present how much a possible frost would affect hazelnut prices. However, he also expressed some other possible threats for hazelnut, such as wind and temperature till August.
“How frost will affect the Black Sea region and overall yield is important. According to last year’s hazelnut flower calculation, the expected amount was around 430,000. The expectation for this year is, on the other hand, around 630,000. If the yield falls below last year, prices may hit the ceiling. In this case, the hazelnuts of the Turkish Grain Board become very valuable. Through a worldwide demand, the board may compensate its losses of millions of dollars.”
Competition warms up globally
Meanwhile, the Hazelnut Promotion Group, or FTG, said on March 11 that the formation of high hazelnut prices despite the constant rise in hazelnut production lately brings forth new rival countries. The world’s hazelnut production, which was nearly 250,000 tons in 1960s, has surpassed 1 million tons today, as Turkey could not limit its plantation area, the group said.
“Hazelnut production began to decline in developed countries such as Italy and Spain between 1995 and 2007 period while it remained same in the United States. However, in Azerbaijan and Georgia, the production adopted an uptrend in that time,” read statement by FTG.
“Georgia’s hazelnut production, which stood at 800 tons in 1995, has reached 9,250 tons, a more than 11-fold increase within 12 years. In Azerbaijan, the situation is quite same as its hazelnut production increased to 17,500 tons from 1,500 tons between 1995 to 2007 period. Hazelnut production in Azerbaijan is expected to rise to 70,000 tons in a short while. Romania also continues planting hazelnuts as well as Armenia, Ukraine and Bulgaria. The increasing prices orient even some of the South American countries toward hazelnut plantation.”
According to the FTG, “The world’s hazelnut exports have increased nearly 2.8 percent over the last 10 years while Turkey’s production has grown by 3.6 percent on average. Turkey determines the world’s hazelnut prices with some little deviations.”
However, some of the countries that have begun hazelnut production recently increase their chances in foreign markets because their production costs are very low compared to Turkey, the group warned. “These countries have also high efficiency in their production. This situation will reduce Turkey’s competition potential in foreign markets as others become a strong competitor.”
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