Hazelnut Situation and Outlook

United States

U.S. hazelnut production in 2000/01 is forecast at 22,680 tons, down 34 percent from the previous year’s harvest, due to the crop’s alternate bearing cycle and good weather conditions. Virtually all of the expected production will come from Oregon, except for an estimated 180 tons from Washington. Exports in 2000/01 are forecast at 12,500 tons, 5 percent below the previous year’s shipments, due to the smaller output. 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 lower production.

Turkey

Turkey is the world’s largest hazelnut producer, accounting for about 70 percent of world supply. The 2000/01 crop is forecast at 550,000 tons, down 10 percent from last year, due to extremely hot weather right 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 IMF to reduce inflation, the Government of Turkey (GOT) is trying to reduce the large production surplus, by gradually lowering the hazelnut support price. FISKOBIRLIK announced a 2000/01 support price of TL 1,100,000/kg. (USD1.70), which represents a 26-percent decrease in real terms from last year’s price of TL 1,020,000/kg (USD2.30).

Producers are upset with the announcement, as the increase was comparatively lower than the support price increases received by producers of field crops. Turkey suffers from a high inflation rate, which was approximately 55 percent last year. FISKOBIRLIK is expected to procure somewhere between 120,000 and 150,000 tons of hazelnuts in 2000/01, although the quantity purchased will be determined by the amount and timeliness of payments provided by the GOT.

Turkey dominates world hazelnut trade and, through FISKOBIRLIK, largely determines world export prices. In 2000/01, exports are forecast at 400,000 tons, the same as last year. Although 80 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 Turkey’s hazelnut exports comprise raw kernels, with the remaining 30 percent being processed kernels, including roasted, sliced, chopped, paste, meal, and flour.

Italy

Hazelnut production in 2000/01 is forecast at 95,000 tons, 14 percent below last year’s crop, due to cyclical crop fluctuation and adverse weather conditions. Imports are expected to increase 14 percent, due to decreased production. Imports of shelled hazelnuts from the United States and Turkey rose in 1999/2000, due to lower-priced Turkish product and decreased supplies of competing hazelnuts from the EU. Exports for 2000/01 are forecast at 30,000 tons, 14 percent lower than last year’s level, due to the smaller crop. In 1999/2000, exports fell by 31 percent, due primarily to intense Turkish competition in Italy’s main hazelnut export markets (Germany, France, and Switzerland). Despite the relatively small domestic crop, prices of Italian hazelnuts during 1999/2000 averaged 5 percent lower than last year. Pricing of exports will continue to be affected by FISKOBIRLIK’s actions and the extent to which the Turkish government underwrites the support price.

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, despite strong grower support for these measures in order to counteract competition from Turkey.

Spain

The 2000/01 hazelnut crop in Spain is forecast to decrease substantially to 16,000 tons, well below last year’s crop of 25,000 tons, due to the crop’s cyclical production and unfavorable weather conditions. Hazelnut exports are expected to decrease and imports to increase as a result of the smaller crop. The United States represents about 5 percent of Spain’s total hazelnut imports and continues to face stiff competition from lower-priced Turkish product, which accounts for 66 percent of Spain’s 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 Spain’s hazelnut and almond sectors. Up to 475 ECU/hectare can be provided to growers to plant improved, higher-yielding varieties. While this program was expected to end this year, Spanish nut growers effectively voiced their opposition to its demise and secured a one-year extension. 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 Lisa Anderson at 202-720-5028. For information on marketing contact Ingrid Mohn at 202-720-5330. Also, visit the tree nuts web page at: http://www.fas.usda.gov/htp/horticulture/nuts.html)

Last modified: Thursday, April 06, 2000