Hazelnuts: Turkish production damaged and prices rocketing
by Market Insider
Wednesday, 27 Aug. 2014
A series of unexpected frost earlier this
year has damaged the production of hazelnuts in Turkey, the first exporting
country of the product in the world; as a result the price of nuts has risen by
60% in recent months, reaching a level not seen for ten years.
This
situation has rather serious consequences in one of the most appreciated
industries: the confectionery industry. There are nuts in almost every snack
find in the supermarkets and in many types of chocolate bars. The frosts have
occurred in Turkey in April and immediately led to an increase in the price of
hazelnuts because of a widespread concern that this year production could have
been seriously damaged.
Turkey alone provides 70% of the world
production of hazelnuts. In recent weeks the harvest has started and farmers
could begin to examine the damage: the prices have slightly lowered but
remained around record levels. At present the estimates of the damage says that
the production of hazelnuts could drop by a third, from 800.000 tons in 2013 to
about 520.000 tons in 2014 but it will be difficult to exactly predict the
entire extent of damage before the end of the harvest season in October.
At the moment a kilo of hazelnuts costs a little less than 6 Euro
compared to 3,50 at the beginning of the year; this price increase will be a
big problem to manage for both the wholesalers who buy hazelnuts in Turkey and
the large confectionery companies that buy from wholesalers and must try to
keep the costs of hazelnuts within the budget provided for the purchases of raw
materials before the frosts.
One example: hazelnuts are one of the
key ingredients of Nutella Ferrero; the company is the largest buyer of
hazelnuts in the world and is therefore very vulnerable to this crisis. A month
ago, Ferrero announced the purchase of Oltan, one of the largest companies in
the Turkish hazelnut sector with a turnover of around €400 million a year, a
move which Ferrero has sought to protect its supply.
Source:
Corriere Ortofrutticolo