Producers of confectionary products, wishing to reduce their dependency on Turkey's erratic and unstable hazelnut yield figures, are showing interest in the development of new areas and sites intended for hazelnut cultivation.
Global hazelnut output in 2015 surged by X%, reaching X tonnes, thereby emerging from the X% decline experienced in 2014. The favourable weather conditions in Turkey were a key factor in promoting this growth. Turkey is the world's leading producer of hazelnuts: last year, Turkey accounted for two thirds of the global hazelnut yield (X tonnes).
Despite being a popular snack product, hazelnuts are also a staple raw material for manufacturers of chocolate confectionary-based products and nut spread, such as Nutella, produced by the Ferrero Group, and which is also the most well-known brand: according to IndexBox estimates, the Ferrero Group's share accounts for X% of global hazelnut consumption.
Global hazelnut production is subject to tangible market fluctuations, despite the increased demand from the consumer sector: in 2009, output contracted by X% (to X tonnes), while in 2010, it increased by X% (to X tonnes) and then in 2011, it again declined by X% (to X tonnes). These swings can be explained by the yield output's reliance on the weather conditions in the key producer-countries, which, besides Turkey, include Italy and the USA - they account for X% and X% of global hazelnut production, respectively.
Strong fluctuations have been a standard dynamic of the global hazelnut market for the past two years. In 2014, Turkey's hazelnut yield in annual terms contracted by a quarter (to X tonnes). As a result of this, global consumption declined by X%, reaching X tonnes and average global prices surged by almost one and a half times - from $X thousand tonnes to $X thousand tonnes. In 2015, Turkey's hazelnut output increased by X%; as a result, global consumption surged by X% (to X tonnes), while the producers' average prices for hazelnuts declined by a quarter (to $X thousand tonnes).
Hazelnuts are being supplied to the global market mainly in their shelled form (i.e., kernels only, without the shell). According to IndexBox estimates, approx. X% of shelled hazelnut output was exported in 2015, amounting to X tonnes. In 2015, global shelled hazelnut consumption bounced back by X% to X tonnes, against a X% decline the previous year, due to the yield fluctuations. Please note, that estimated figures for shelled hazelnut consumption in terms of weight are significantly lower than production figures, as the kernel usually makes approx. a half of the whole nut weight.
Due to the stringent requirements regarding the quality and freshness of the raw hazelnut product, hazelnut processing manufacturers (Ferrero Group, for example, only procures hazelnuts in their shell) prefer to locate their production facilities as close as possible to the cultivation centres. Manufacturers of confectionary products prefer those countries with a climate similar to that of the Mediterranean; Chile, Australia, Argentina, New Zealand and the Republic of South Africa, therefore, appear to be promising prospects in terms of hazelnut cultivation.
In Chile, from 2007-2015, hazelnut production surged from X thousand to X thousand tonnes (in-shell hazelnut equivalent). This strong growth was made feasible, due to the increased amount of area being directed for hazelnut cultivation - from X ha. in 2000 to X ha. in 2015. Maule (X ha.) and Araucania (X ha.) are the key regions in Chile for the cultivation of hazelnuts; Bio-Bio is set to become a hazelnut producing region in the future. The Chilean authorities plan to increase the amount of acreage for hazelnut cultivation to X ha. in X, enabling the country to become the world's third largest hazelnut producer, with a total yield of X tonnes.
According to IndexBox estimates, Australia's hazelnut output currently stands at approx. X tonnes a year. However, due to the planting of young hazelnut trees in the states of New South Wales, Victoria and Tasmania, Australia will be capable of supplying hazelnuts on an industrial scale by X. In addition, unlike North American countries, the hazelnut trees in Australia are not susceptible to fungus, thereby minimising, or even erradicating, the need for pesticides.
IndexBox analysts conclude that the increased hazelnut output in Chile, Australia, Argentina, New Zealand and South Africa will encourage and promote the eradication of any inter-annual fluctuations in terms of hazelnut supply on the global market.
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