Hazelnut Situation and Outlook
U.S. hazelnut production is forecast to more than double to 36,000 tons in 1997/98. If realized, this hazelnut crop would be the largest since 1989/90. Crop progress is somewhat ahead of normal following nearly 40 days without rain. Several factors have contributed to this season's large production expectations. First, with the hazelnut's tendency toward alternate year bearing, the small crop in 1996/97 points to a larger crop this year. Second, largely favorable winter and spring conditions allowed for good catkin development, excellent pollination and a larger nut set. Some orchards, mainly at higher elevations, sustained limb breakage resulting from an early November snow storm; however, crop development was mostly unaffected.
In 1997/98, U.S. hazelnut exports are forecast to rise slightly to 17,000 tons. In 1996/97 U.S. in-shell exports totaled 9,392 tons with the European Union the major market, accounting for 53 percent of total sales, followed by Canada with 9 percent and Brazil with 8 percent. Shelled hazelnut exports in 1996/97 totaled 2,697 tons (6,903 tons in-shell equivalent) with China accounting for 34 percent of total sales followed by Mexico with 12 percent, Israel 10 percent, and Canada 9 percent.
Turkey supplies most of the U.S. imports of shelled hazelnuts and the European Union all the prepared and preserved hazelnuts.
Turkey is the world's largest hazelnut producer, accounting for 75 percent of selected country production. Turkey's hazelnut production in 1997/98 is forecast at 475,000 tons, slightly below the previous year's output. Despite abnormally hot weather in the Giresun area, weather conditions have been mostly normal in other areas during the early growing season.
Turkey is also the world's largest hazelnut exporter, accounting for more than 80 percent of selected country exports. Exports in 1997/98 are forecast at 350,000 tons, 7 percent below the previous year's shipments. The government's new high support price for hazelnuts and the export tax of $10 U.S. dollars per 100 kilograms will likely make Turkish hazelnut export prices higher and less competitive.
The Turkish government increased the hazelnut support price 20 percent in U.S. dollar terms for the 1997/98 hazelnut harvest and 140 percent in Turkish Lira (TL) terms to TL 400,000 per kilogram (U.S.$2.40). This base support price will be increased by TL 25,000 per kilogram every month for the first 4 months of the season. In comparison, the rate of inflation for the last 12 months was around 85 percent.
Because of the high support price, FISKOBIRLIK (The Union of Hazelnut Sales Cooperatives) will likely have to buy large quantities of the 1997/98 Turkish crop, assuming adequate government funding for the purchases. Last season FISKOBIRLK bought about 105,000 tons of hazelnuts because of an attractive support price. These purchases were largely carried over into the new crop year as stocks, since selling them into the local market or exporting them would have affected prices.
Domestic consumption in 1997/98 is forecast to increase 67 percent because most of FISKOBIRLK's old crop stocks are expected to be crushed for oil. In the past, when stocks were crushed for oil, consumption has exceeded 100,000 tons.
Italy's hazelnut exports in 1997/98 are expected to decrease due to reduced supplies resulting from a smaller stock carry-in. However, Italy's exports could be higher than forecast if high Turkish price supports result in higher Turkish stocks and domestic consumption. Italy's exports in 1996/97 are estimated at 68,000 tons, 130 percent above the previous year's volume and the highest since 1991/92. Italian exports increased last season because of reduced exports from Turkey, where stocks were built up sharply due to high domestic support prices.
(For further information on supply, distribution, and trade contact William Janis at 202-720-0897. For information on U.S. marketing opportunities, contact Steve Shnitzler at 202-720-8495.)