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Hazelnut Situation and Outlook
|Hazelnut production in selected countries in 2001/02 is forecast to increase 38 percent to 843,817 metric tons, due to increased output in all major hazelnut-producing countries. Total world hazelnut supply has also increased, although not as significantly, due to an increase in world production and Turkeys larger carryover stocks. Total exports from selected countries in 2001/02 are forecast to increase 12 percent to 520,750 tons, due to higher production in all countries. U.S. hazelnut exports are forecast at 27,750 tons, 122 percent above last year due to a much larger crop. Future world production and supplies will be strongly influenced by the outcome of Turkeys implementation of International Monetary Funds (IMF) reforms to gradually phase out its hazelnut support price.|
U.S. hazelnut production in 2001/02 is forecast at 43,817 tons, up 113 percent from the previous years harvest and 22 percent above 1999/00 production. This is due to the crops alternate bearing cycle and good weather conditions. Virtually all of the expected production will come from Oregon, except for an estimated 270 tons from Washington. In fact, Oregons production is expected to be a record for the second time in the past four years. Oregons previous record was 42,638 tons in 1997. Exports in 2001/02 are forecast at 27,750 tons, 122 percent above the previous years shipments, due to the much larger output. However, U.S. exports will face increased international competition from lower-priced Turkish product, as Turkey gradually phases out price supports to FISKOBIRLIK (The Union of Hazelnut Sales Cooperative). Hazelnut prices are expected to remain relatively stable, despite higher production.
Turkey is the worlds largest hazelnut producer, accounting for about 70 percent of world supply. The 2001/02 crop is forecast at 630,000 tons, up 29 percent from last year, due to favorable weather conditions before harvest. Hazelnut production is one of the most important economic activities in the country, employing an estimated 385,000 growers. Of these, most grow hazelnuts to supplement their primary income, own about 1 to 2.5 hectares, and use family labor at harvest. Only a few large growers rely solely on hazelnut production as their primary income. There are approximately 536,000 hectares in production, although this is difficult to determine, given the lack of systematic crop surveys.
Following through on its commitments to the International Monetary Fund (IMF) to reduce inflation, the Government of Turkey (GOT) is trying to reduce the large production surplus, by gradually lowering the hazelnut support price. On August 18, 2001, the general director of FISKOBIRLIK announced the MY 2001/02 procurement prices, which are differentiated by the type of hazelnut. Levant type hazelnuts, which are an estimated 70-80 percent of the total production will receive the support price of TL 1,500,000. ($1.06/kg), which represents a 36-percent increase in nominal terms from last years price of TL 1,100,000 ($2.30/kg). The announcement has not been well received by growers. Although the MY 2001 price is 36 percent higher in nominal terms that it was the previous year, inflation was 65 percent during the last 12 months and devaluation of the Turkish Lira at about 225 percent. FISKOBIRLIK is expected to procure between 100,000 and 150,000 tons of hazelnuts in 2001/02, although the quantity purchased will be determined by the amount and timeliness of payments provided by the GOT.
Turkey accounts for more than 80 percent of the world hazelnut trade and, through FISKOBIRLIK, largely determines world export prices. Indicative export prices in early August were around $280.00 per 100 kilograms compared to $300.00 a year earlier. Export prices dropped recently to $225.00 after FISKOBIRLIK announced the new procurement price. In 2001/02, exports are forecast at 420,000 tons, up 4 percent from last year. Although 78 percent of Turkish exports go to the EU, Turkey is trying to expand markets in Asia, the former Soviet Union countries, as well as the United States, where it is involved in a joint promotion program with U.S. growers to increase U.S. hazelnut consumption. About 70 percent of Turkeys hazelnut exports comprise raw kernels, with the remaining 30 percent being processed kernels, including roasted, sliced, chopped, paste, meal, and flour.
Hazelnut production in 2001/02 is forecast at 135,000 tons, 63 percent above last years poor crop, due to cyclical crop fluctuation and favorable weather conditions. Imports are expected to decrease 25 percent, due to increased production. Imports of shelled hazelnuts from the United States and Turkey dropped to zero in 2000/2001, due to the cheap price of Turkish product and increased supplies of competing hazelnuts from the EU. Exports for 2001/02 are forecast at 3,000 tons, 36 percent above last years level, due to the larger crop. In 2000/01, exports fell by 14 percent, due primarily to aggressive Turkish competition in Italys main hazelnut export markets (Germany, France, and Switzerland). Reduced domestic supplies in 2000/01 (due to the poor Italian crop) strengthened the market, and prices of Italian hazelnuts averaged about 13 percent more than the previous year, despite the increasing imports of shelled hazelnuts from Turkey. The forecast of large crops both in Turkey and Italy, on the other hand, will likely depress the market during the next marketing year.
The EU program favoring domestic hazelnut producers (which provided payment of 15 EUROs per 100 kg., in-shell basis) has expired and no new support actions have been adopted by the EU for the hazelnut industry. This is despite strong grower support for these measures in order to counteract competition from Turkey. The EU Commission will probably produce a draft proposal by the end of this year, to be discussed by the Council next year, although budget constraints will limit the impact of such a new policy initiative.
The 2001/02 hazelnut crop in Spain is forecast to increase substantially to a record 35,000 tons, more than double last years crop of 16,000 tons, due to the crops alternate bearing cycle and unusually rainy weather during the summer of 2001. Hazelnut exports are expected to increase and imports are expected to decrease as a result of the much larger crop. The United States represents about 5 percent of Spains total hazelnut imports and continues to face stiff competition from lower-priced Turkish product, which accounts for 65 percent of Spains imports. All Turkish hazelnut exports to Spain are shelled, while U.S. exports are in-shell. The bulk of the hazelnut crop is consumed in-shell, with the confectionary and chocolate industries consuming 60-70 percent of total supplies.
While there is no price support program for tree nuts, the EU does have an improvement plan that is implemented in both Spains hazelnut and almond sectors. Up to 475 ECU/hectare can be provided to growers for varietal improvement of their orchards. The Government of Spain and industry continue to seek an extension of the Program until the implementation of the new fruit and vegetable regime begins, in principle scheduled for 2003. Spanish nut growers have been very vocal in arguing for an extension of this program. Given competition from Turkish product, Spanish hazelnut growers consider this program vital to their future competitiveness and are expected to oppose the most recent EU proposal for reform of the fruit and vegetable regime, which calls for a significant cut in subsidies.
The FAS Attaché Report
search engine contains detailed reports on Tree Nut Competition
or Market Intelligence for 16 countries, including Turkey, Italy,
and Spain. (For information on production and trade, contact Erik
Hansen at 202-720-0875. For information on marketing contact
Ingrid Mohn at 202-720-5330. Also, visit the tree nuts web page