Soaring hazelnut prices drive sweets-lovers nuts
A spring frost in Turkey destroyed hundreds of thousands of hazelnut flower buds and is responsible for an expected global deficit of the nut. Prices of hazelnuts are expected to increase 60 percent.
Turkey produces around three-quarters of the world’s hazelnuts.
Hazelnuts have a unique flavor and few substitutes are available for confectioners. Ferrero, maker of highly popular Nutella spread, is the largest global purchaser of the nut. The crisis prompted the company to buy Turkey’s biggest hazelnut producer in July in a deal which aggravated competitors.
Hazelnut harvests begin in the next few weeks. Based on bud count, an anticipated 800,000 metric tons has been reduced to 520,000 metric tons, according to Brijesh Krishnaswamy, senior vice president at Olam International, a global agricultural trader.