Turkey markets world's largest hazelnut stocks

Turkey is the world's top hazelnut producer, and expects to generate $1.3 billion from exports of the crop this year.

Private firms normally buy directly from farmers to export the nuts.

"TMO set export prices for its 2007 and 2008 hazelnut output. Now it is talking to foreign buyers and is collecting offers," TMO Chairman Mesut Kose told Reuters.

"The TMO has the world's largest hazelnut stocks and we decided to export them for the first time as we saw a supply deficit in the market," Kose said.

He said many foreign buyers were interested. The TMO has accumulated stocks since 2006 after the government appointed it as the hazelnut market regulator to ensure a steady flow of product to the market.

It will still keep a part of its stocks as it expects production to fall next year.

"Our stocks which belong to 2007 and 2008 crops are allocated for both domestic and foreign sales," he said.

The TMO now has 590,000 tones of stocks, after it has purchased 694,000 tonnes of hazelnuts since 2006.

The prices the TMO set for Levant-quality hazelnut kernels vary between 4.40 lira-9.80 lira ($2.83-$6.32) per kilogram, while they are 6.00 lira-12.00 lira for Giresun-quality hazelnut kernels.

Firms from several countries including Switzerland, Germany, Italy, Russia and the United States submitted bids to buy hazelnuts from Turkey, he said.

"We see serious demand for hazelnuts. If we agree with all buyers, we will have sales very much in line with our expectation," Kose said.

"We believe that $5-$6 are the optimum prices for foreign industrialists to meet their demand. We think these prices will raise our exports," he said.

Turkey's exports of hazelnuts have risen 13 percent since August to 189,000 tones as chocolate demand survived the global financial crisis.

A quarter of a million farmers cultivate hazelnuts in Turkey, which makes a powerful farm lobby. Farmers have taken to the streets on several occasions to protest against lower-than-expected government purchase prices.

Spain and Italy are its rival producers. The European Union is the biggest hazelnut market for Turkish hazelnuts.