Christmas Hazelnut shortage threatens holiday favorites, prices may skyrocket | Know why

As the holiday season approaches, a looming hazelnut supply crisis is casting a shadow over beloved Christmas treats. The shortage, attributed to factors like inadequate rainfall and insect-related problems, could have wide-ranging implications, including possible price hikes.

Turkey: The Hazelnut Capital

Turkey, responsible for approximately 70 percent of global hazelnut production, is facing an unusually low yield this year due to unfavorable weather conditions. This has raised concerns, especially for companies like Ferrero, renowned for its Ferrero Rocher chocolates and Nutella spread.

Potential Shortage or Price Increase

Marketing experts suggest that the supply crisis could result in fewer Ferrero Rocher boxes on store shelves or an increase in the cost of these cherished chocolate treats. Already, the price of hazelnuts has surged by over 40% in the eight weeks leading up to September 27, reaching $780/100kg (£637/100kg), according to Mintec data.

Causes of the Shortage

Mintec senior analyst Jara Zicha explains, "The price increase is indeed driven by shorter-than-expected production in Turkey. The initial estimates from May/June this year came in at 720,000 to 810,000 tonnes. When the harvest started, farmers started reporting much lower output, which has caused prices in Turkey to surge."

Kenan İncirkuş, a trader from Giresun, Turkey, pointed out that there are "very few hazelnuts" this year, with global warming, insect damage, and a lack of rainfall during the critical nut development period in May contributing to the scarcity.

Balancing Supply and Demand

Swaroop Joshi, sales and marketing VP at hazelnut supplier Ofi notes that while supplies are currently low, they are believed to be sufficient to meet existing demand. However, the challenge arises when considering the shrinking demand, particularly for companies like Ferrero, significant hazelnut purchasers.

Nutella Prices Already Affected

The price of Nutella, which heavily relies on Turkish hazelnuts, has already increased due to rising global prices of other key ingredients, such as sugar and cocoa. If higher hazelnut prices persist, some companies may explore substituting hazelnuts with nut mixes in their products.

A Glimpse into Past Shortages

This is not the first time holiday favorites have faced supply issues. Just last year, Brits were warned of a potential turkey shortage at Christmas due to a bird flu outbreak. Poultry farmers faced significant losses, leading to concerns that many families might miss out on their traditional Christmas dinners.

British Poultry Council chief executive Richard Griffiths described the situation as "huge," with approximately 1.6 million birds culled due to bird flu on farms. Such outbreaks incurred significant ongoing costs for the industry and raised worries about the availability of free-range turkeys during the festive season.

Paul Kelly, owner of Kelly Turkeys in Colchester, Essex, known as the "King of Turkeys," expressed concerns about the "devastating" spread of the outbreak, predicting a "big, big shortage" of British free-range turkeys.

As the hazelnut shortage unfolds, holiday treat enthusiasts may need to prepare for possible changes in availability and prices this Christmas season.

FAQs

Why is there a shortage of hazelnuts?

The worldwide appetite for hazelnuts, a crucial ingredient in beloved treats like Nutella and Ferrero Rocher chocolates, is steadily increasing. However, the restricted geographical regions suitable for cultivation and the extended maturation period of hazelnut trees may pose challenges for hazelnut enthusiasts in the future.

Which country has the best hazelnut?

Turkey holds the title of the world's leading producer and exporter of hazelnuts. This prized nut crop has its roots in the heart of Anatolia, where wild species have played a pivotal role in shaping the varieties cultivated today.