15 Aug 2014 Chocolate and snack crunch: hazelnut prices soar
Chocolate makers already choking on the rising price of cocoa face another price crunch in commodity markets after warnings of a global shortage of hazelnuts.
The price of hazelnuts has increased by more than 60% this year to a 10-year high after bad weather devastated crops in Turkey, the world’s biggest producer.
About 70% of the world’s hazelnuts are grown on steep slopes near Turkey’s Black Sea coast, but this year’s harvest is likely to be sharply down after hail storms and frost in late March destroyed hazel flowers at a critical moment in the growing season.
The price of the nuts has reached $10,500 per tonne, compared with $6,500 per tonne in February, according to Michael Stevens, a trader at Edinburgh-based Freeworld Trading.
The full extent of the damage is not yet clear, but the Turkish industry is braced for a harvest that could be down to 540,000 tonnes, against pre-frost expectations of up to 800,000 tonnes.
It comes as food companies also face rocketing prices for almonds, cocoa and coffee – a potential nightmare for those who enjoy a Ferrero Rocher with their after-dinner coffee.
The hazelnut price rise will be particularly tough for buyers at some of the world’s biggest confectionery companies, such as Cadbury, whose Whole Nut bar – made with hazelnuts – is one of its bestsellers.
Ferrero, the Piedmont-based company that makes Ferrero Rocher and Nutella, the cocoa and hazelnut spread, will also be watching the market closely. Ferrero is the world’s biggest buyer of hazelnuts, using 25% of the world’s supply and making 180m kg of the spread every year, according to the Italian Trade Agency.
But the company could be insulated from the latest price moves following its recent purchase of Turkey’s largest hazelnut processor, Oltan.
The deal to purchase Oltan, which has eight factories shelling, chopping and roasting nuts, is reported to have unsettled other confectioners, which are uncomfortable that one of their suppliers has fallen into the hands of a rival.
Meanwhile, almond prices are at a nine-year high, because of drought in California, the world’s biggest grower, while a prolonged dry spell in Brazil in January and February reduced the coffee harvest, pushing up prices.
Not all the current price moves in food commodities are due to unseasonal weather. The price of cocoa has been driven to a three-year high with consumers in China and India getting a taste for chocolate.
Source: The Guardian