Latest Trends in the Turkish Sultanas Market: An Insightful Update

Executive Overview & Key Points

  • Sudden Spike in Material Costs: Recent weeks have seen an extraordinary escalation in the cost of raw materials, with prices soaring from 60 TL to 85 TL, an equivalent rise of about 500 USD per ton. This spike defies expectations given the slight reduction in exports from Turkey, which has seen a mere 4,000-ton decrease from the previous year despite significantly higher prices.

  • Market Reactions and Demand Patterns: Anticipation of a potential shortage has led both exporters and purchasers to secure supplies early, driving prices upwards. The demand from the alcohol sector, unable to meet its initial raw material requirements, and an uptick in domestic consumption due to Ramadan, have been key factors in this rapid price increase.

  • Market Pricing Today: The going rate for Type 9 raw materials is presently around 84-85 TL per kg (2.60 - 2.65 USD), or approximately 3,100 USD/ton FOB. The market is witnessing varied pricing, influenced by the stockpiling strategies of exporters and their raw material inventory levels.

  • Future Market Influences: The season's remaining duration poses questions regarding raw material sufficiency, with potential shortages expected to further drive prices up. Early crop awakening due to warmer weather conditions and the critical frost risk period are additional determinants of price trends. Post-election currency fluctuations are also anticipated to impact market dynamics.

  • 2023 Crop Data Comparison: The export figures show a slight decline from the previous year, with a notable increase in the average price from USD 1,685 to USD 2,132. The 2023 crop estimates range from 210,000 to 220,000 tons, with a carryover from 2022 estimated between 50,000 to 60,000 tons.

In-Depth Analysis

  • Underlying Causes of Price Increases: The stable demand for exports against the backdrop of rising prices reflects a strong global market interest. The alcohol industry's higher procurement costs and increased domestic consumption during Ramadan have significantly influenced market dynamics.

  • Fluctuations in Market Pricing: The immediate market response to anticipated raw material shortages has led to fluctuating prices. The strategic reserves held by exporters and the speculative nature of their inventory management have further complicated the pricing landscape.

  • Anticipated Market Drivers: The adequacy of raw material reserves, weather-related crop impacts, and economic adjustments following the elections will be crucial in shaping future market conditions. The decision by the TMO on whether to release its stocks post-election will be a pivotal factor.

  • Crop Year Comparison and Insights: The minimal export volume reduction alongside a marked price increase highlights a market adjusting to tighter supply conditions. These metrics offer a comprehensive snapshot of the current crop year's status compared to past cycles, underscoring the industry's adaptability to shifting market forces.

Conclusion

Navigating through a period of notable price instability and challenging market conditions, the nuts and dried fruits sector stands at a critical juncture. The ensuing months will be vital in determining market direction, with environmental, economic, and policy developments playing key roles in industry stability and growth prospects.

Julia Manolakaki