Hazelnut prices are rising sharply – also due to climate change

Istanbul/Hamburg. This development affects chocolate, spreads, and muesli. Hazelnut prices have risen by more than a third since the beginning of the year until the harvest season, affecting companies such as Ritter Sport, Seeberger, and Zentis in Germany.

The high prices are due to the unique nature of the hazelnut market. Turkey, the producing country, dominates the global market. Around 60 percent of hazelnuts grow primarily on the green mountain slopes along the Black Sea coast, where the nut is also called "green gold" due to its importance.

In April, a cold snap damaged blossoms and shoots there, causing prices to climb even before the harvest began. Agriculture Minister Ibrahim Yumakli called it one of the worst agricultural frosts in Turkish history. Experts cited climate change, which is causing extreme weather to become more frequent, as the reason.

Turkey's state-run Anadolu news agency reported that the Grain Council, a state market regulator, expects the harvest to fall by 36 percent to about 450,000 tons this year.

An employee of Alfred Ritter GmbH & Co. KG sorts chocolate bars in production at the headquarters.

Source: Marijan Murat/dpa

The price hike particularly affects companies that also source expensive cocoa. Examples include the Swiss chocolate manufacturer Lindt & Sprüngli, the Elmshorn-based muesli brand Kölln, and Ritter Sport from Waldenbuch near Stuttgart. Ritter Sport processes several thousand tons of hazelnuts annually, which come primarily from the Turkish Black Sea coast, with smaller quantities also from the USA.

The night frosts in Turkey and the price increases are having a noticeable impact on the chocolate manufacturer, says a company spokesperson. Hazelnuts, like cocoa, are cost-intensive. "We are therefore seeing a massive (double) burden on the raw materials side." This burden will not go away – also due to climate change.

The Ulm-based snack provider Seeberger offers natural hazelnut kernels. The kernels come from Italy, the second most important hazelnut-producing country. However, the expected shortages in Turkey will also affect Seeberger, a company spokesperson reports. As the largest producer, Turkey has an impact on the global market, which is also causing prices to rise in Italy.

"The current development is also a reflection of the increasing climate risks for agriculture," says Seeberger. Scientists call the fact that the effects of climate change are causing prices to rise, for example for food, "climateflation."

The price increases are likely to hit the world's largest buyer of hazelnuts the hardest: Nutella producer Ferrero, which is estimated to source about a third of all hazelnuts. The company declined to comment on the price development when contacted. Ferrero denied any supply disruptions. Ferrero sources hazelnuts not only from Turkey but also from Italy, Chile, and the USA, ensuring its supply.

The world's largest buyer of hazelnuts: Ferrero plant in Stadtallendorf

Source: picture alliance / Arne Dedert/dpa

Alexander Sterk founded the Amsterdam-based platform Vesper BV, which provides data on food markets that are often opaque. Vesper surveys producers, retailers, and food companies – including those in Germany. Sterk reports that a ton of Turkish hazelnut kernels now costs around €9,400. This represents an increase of more than a third since the beginning of the year.

"The price of hazelnuts is currently very high," says former trader Sterk. That's why hazelnuts are hardly being traded at the moment, he says—unlike peanuts, for example. He also sees companies trying to change recipes to reduce the hazelnut content.

Rainer Lückenhausen is a partner at the long-established Hamburg trading house Schlüter & Maack, which specializes in hazelnuts, among other products. He predicts that companies will switch to other types of nuts, particularly almonds, "which are more attractively priced."

Lückenhausen suspects that at least further price increases for hazelnut kernels will be avoided. "We currently do not expect any further serious harvest declines." One uncertainty factor is climate change, which leads to weather changes that affect yields. The effects are difficult to predict.

The frost damage in Turkey is hitting producers the hardest. Many farmers are not insured against crop failure. In villages along the Black Sea coast, hazelnut cultivation is so economically dominant that it is often the sole source of income. "The winter was harsh here. The snow in April ruined everything," a harvest worker told the Turkish news agency DHA.

A few days ago, the State Grain Authority, as usual, set an official minimum purchase price for hazelnuts at harvest time, intended to stabilize the market. This year, the purchase price for one kilogram of nuts is around €4.20. This is almost 17 percent higher than last year in euro terms. Based on the national currency, the lira, which is constantly depreciating, it represents an increase of more than 50 percent.

Nurittin Karan, chairman of the Chamber of Agriculture in the Giresun region, nevertheless expects buyers from Germany and other countries to quickly buy up the stocks. This could mitigate any shortages in Germany: a significantly smaller portion of the harvest will be retained for the Turkish market. The rest will be exported.

RND/dpa