Hazelnuts, a commodity? - Agiboo

Hazelnut farming in Turkey

The opportunity was there to travel through the north of Turkey, the area most known for the farming of hazelnuts. It is not a far ride from Istanbul to reach the first provinces where large fields of hazelnut trees can be found. Entering the province of Sakarya and driving a bit towards the black sea, the landscape becomes somewhat hilly and green. It doesn’t take long to find quiet roads with on both sides hazelnut trees. It is a kind of ‘bushy’ vegetation and it marks the beginning of vast area alongside of the Black Sea towards Georgia. Here more than 70% of the world production of hazelnuts is farmed.

Hazelnuts for sale

While driving between the hazelnut trees you sometimes find some people who are selling them at the side of the road. I stopped by two ladies with an improvised road shop to buy some. They were fresh and green with the leaves still surrounding the nut. They claimed they were taken from the trees just an hour ago. I studied them and figured out quickly how to take out the nut and how to crack them. The taste was fresh too. I must admit that I like them more roasted.

Hazelnut region

The area impressed me much, and wanted to know more about this area and the hazelnut farming. Many of our clients who trade cocoa are also trading hazelnuts and use our Agiblocks (CTRM) to manage the operations. Not surprisingly as chocolate and hazelnuts go well together. In bars or in a hazelnut cocoa spread for example. With high contents of vitamins like E, B1, B2 and B6 they seem pretty good for your health as well.

The areas near the Black Sea have been historically producing hazelnuts for more than 3000 years and the rest of the world consumes them already since the middle ages. It is just one of the very few areas in the world where the climate is so ideal to grow Hazelnuts. The area involved is around 600 thousands of hectares. The question raised in my head about how all this is organized from a commodity trade perspective. How are prices set. How does it impact the world consumption when an area is responsible for over 70% and would be hit by bad weather etc.

Cooperative

Talking with a few farmers which I visited to see the farms I noticed the hospitality of the farmers. Each farmer is very proud of their fields and I must admit they are absolutely entitled to. Nature is beautiful on all of the farms I have visited. By having conversations, one name appeared in each conversation, which is Fiskobirlik. Fiskobirlik is some kind of a cooperative organizing the operations around the nuts in this region. It has even its own website. I soon figured out that it is not so easy to find information in English about this organization. Nevertheless it caught my interest as apparently it gets managed rather well. With about 250000 farmers connected and many sub cooperatives it can be considered as being pretty large.

The farming of the hazelnuts is one thing, but as with any commodity. Logistics, storage, processing possibilities and most of all pricing mechanisms which allow somewhat protection for farmers and buyers it was an impressive discovery. This is becoming even more obvious when visiting Ordu. Ordu is the center of this all with good port facilities to export the nuts. Hazelnuts have many similarities with other commodities. The packing is many times in bags. It knows types such as Giresun, Levant and Akcakoa. Quality is determined by type, moisture and oil content or the amount of broken kernels.

Future of the hazelnut market

Knowing that for example the cocoa and coffee have a liquid derivative market to smoothen price volatility I am wondering what would happen when severe bad weather would ruin an entire crop. I understood that some organizations largely depending on hazelnuts supply have bought assets in this region to secure this supply. Will the hazelnut become a commodity with a derivative market in the future? It is hard to say, the second largest grower seems to be Italy. The region in Turkey however will remain the largest for quite some time.

It will be interesting to follow. The developments of the price and the developments of the region itself. I enjoyed the trip and can recommend to visit the region when you have the chance. In the supermarket in Turkey I found some cocoa hazelnut spread, produced by Fiskobirlik. It had the highest hazelnut content I had ever seen and it made definitely a great lunch with some fresh baked bread.

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