Hazelnuts Facing Price Increases Due to Climate Change Impact
Climate change has brought a new challenge to the global hazelnut market, particularly in Turkey, the world's largest producer, with the severe frost in April causing substantial damage to hazelnut crops. The frost, attributed to climate change, has resulted in a 36% decrease in this year's hazelnut harvest to about 450,000 tons, according to the state-run Turkish news agency Anadolu [1].
The frost affected orchards even at higher altitudes, with some experiencing up to 100% damage, according to Turkey's Union of Agricultural Chambers (TZOB) president [4]. Turkey normally produces around two-thirds of the global hazelnut supply, so such a decrease has significant market repercussions.
The effects on chocolate manufacturers and other companies relying on hazelnuts are considerable. Rising hazelnut prices increase costs for major global chocolatiers, including Ferrero from Italy, heavily dependent on Turkish hazelnuts [1][2][3][5]. The current price of a ton of Turkish hazelnut kernels is approximately 9,400 euros, an increase of more than a third since the beginning of the year [6].
The reduced Turkish harvest heightens dependency concerns. Companies are exploring expanding sourcing options to other countries like Chile, Georgia, and the U.S., though production there is smaller, flavor profiles differ, and scaling takes years due to the long maturation of hazelnut trees [2].
The limited stockpile from previous years has now been depleted, tightening supply availability further [2]. Companies are trying to reduce the hazelnut content in their products as a cost-saving measure. However, this could potentially affect the quality and consumer appeal of their products.
Agriculture Minister Ibrahim Yumakli described the agricultural frost as one of the worst in Turkey's history [5]. The frost damage is particularly affecting producers who are not insured against crop losses. The official minimum purchase price for hazelnuts during the harvest season in Turkey has been set to around 4.20 euros per kilogram, about 17% higher than last year on a euro basis, and over 50% higher based on the national currency, the lira [7].
Ferrero, the Nutella producer, is estimated to purchase about a third of all hazelnuts worldwide [8]. Despite the price hike, Ferrero denies any supply disruptions [9]. Lukas Müller and Anne Pollmann, involved in the development of chocolate, spreads, and muesli, are among those affected by the expected declines in Turkey's hazelnut production [10].
Seeberger, a snack provider from Ulm, is also affected by the current development. The company attributes the situation to the increasing climate risks for agriculture [11]. Nurittin Karan expects buyers from Germany and other countries to quickly purchase the stocks, which could ease a potential shortage in Germany [12].
The nut is often referred to as "green gold" due to its importance. In villages along the Black Sea coast, hazelnut cultivation is economically dominant and often the sole source of income [13]. Experts predict that companies will switch to other types of nuts, particularly almonds, which are "more price-competitive" [14].
As the world grapples with the impacts of climate change, extreme weather events like the one in Turkey are becoming more frequent, posing significant challenges to agricultural industries and global food supply chains.
References: 1. Anadolu Agency 2. Reuters 3. Bloomberg 4. Hurriyet Daily News 5. DW 6. MarketWatch 7. Anadolu Agency 8. Bloomberg 9. Ferrero 10. Handelsblatt 11. Seeberger 12. Handelsblatt 13. Anadolu Agency 14. Bloomberg
- The severe frost in Turkey, attributed to climate change, not only affected the global hazelnut market but also sparked concerns in the science and environmental-science community, as such extreme weather events might become more common due to ongoing climate change.
- Acknowledging the impacts of climate change on health-and-wellness, the reduced Turkish hazelnut harvest may prompt the food industry, including chocolate manufacturers and spread producers, to consider alternative sources like almonds (more price-competitive in nutrition) for their health- and fitness-and-exercise conscious products.
- The effects of the frost in Turkey have revealed the interconnectedness of agricultural industries, as the challenging conditions in the world's largest hazelnut supplier might necessitate adjustments in the production and pricing of products as diverse as chocolate, snacks, and muesli, ultimately shaping the landscape of environmental-science, climate-change, and health-and-wellness choices for consumers around the world.
