After the quiet weeks of the last months, the past trading week was (finally) very busy again. On the one hand, there was increased buying interest in third-quarter covers, but there is also lively interest in fourth-quarter covers. Essentially, little has changed in the market situation. The market continues to split into sellers who are very optimistic about the coming season and sellers who show a certain amount of caution. The price lists are correspondingly different. Particularly concerning natural kernels for the fourth quarter and beyond, there is still a certain restraint as one waits for the publication of the harvest estimate on 13 May at the INC in Dubai. This week, there have also been repeated reports of damage to hazelnut orchards on the Black Sea coast due to the long frost period. This, together with the increased demand, has led to a slight increase in raw material prices again.
In addition to commodity prices, we also saw the Turkish lira strengthen slightly against the euro this week, but this may be due more to the euro’s weakness than to strong figures from Turkey. In recent months, the Turkish lira has been surprisingly stable, even though monetary policy has not been adjusted to inflation (61.14% year-on-year in March, according to the Turkish central bank). The Central Bank of Turkey kept the key interest rate at 14 per cent. We see that the price lists towards the end of the week were nevertheless significantly higher than those of the previous week. Due to the well-negotiated deals, we see statistically, on average, a level in line with the last week.
This week, the TMO also announced that it would again be a seller of certain positions in May. Unlike last time, it will not raise the price further but leave it at 41 TRY/kg.
As there will be a holiday in Turkey from Sunday to Wednesday (the festival of breaking the fast after Ramadan), we expect the coming week to be less active than this one. The representatives of the export union will meet afterwards to discuss the figures for the presentation at the INC. Currently, the teams are still out in the gardens. This figure will be essential because we hear mostly positive forecasts from the other origins so far. Especially from the Italian market, after this year’s crop failure, there is a lot of optimism again regarding the harvest volume. The price development thus depends significantly on the figure from Turkey. However, one should not forget that it is not only the harvest quantity that is decisive for the price formation. The TMO will be active again next season to “compensate for inflation”, and the exchange rate development should also be considered.
- Commodity prices rise slightly on good demand and crop uncertainty
- Turkish lira gains slightly against the euro.
- Significant increase in demand and contracts. Focus increasingly on the 2022 harvest
- We hear overwhelmingly positive crop estimates from alternative origins, so the release of the crop estimate on 13 May is eagerly awaited.
- TMO continues to offer in May at 41.0 TRY/kg. (Reference free market approx. 38.0 TRY/kg).
- Less trading activity is expected due to the holidays next week at the end of Ramadan.