Nutella Fans Brace to Pay More As Frost Hits Turkish Hazelnut Harvest

First olive oil, then cocoa and coffee. Now a fresh supply squeeze is set to hit another food pleasure - the hazelnuts that go into making the chocolaty Nutella spread. 

Wholesale prices in Turkey, which accounts for around 65% of global hazelnut output, have jumped by around 30% since April following the country's worst spring frost in more than a decade. And they are expected to continue rising, according to data from agricultural intelligence firm Expana.

"Fluctuations in Turkish supply and pricing ripple through the entire market," the International Nut and Dried Fruit Council, an umbrella body for the industry, said. Some alternative supply is available from smaller producers Italy, the US and Chile, "though not enough to fully offset Turkey's dominance."

Some hazelnuts farmers have lost 50%-100% of their crop, according to Turkey's National Hazelnut Council.

Turkey accounts for around 65% of global hazelnut output.

That could be bad news for the world's biggest buyer, Italy's Ferrero SpA, which takes around a quarter of Turkey's crop to make products like Ferrero Rocher chocolates and Nutella. Hazelnuts constitute 13% of the spread's ingredients, and it produces millions of jars each year.

Weather events including the frost "can have an impact" on Turkish production, the confectionery maker said in a statement, but added that that it didn't expect disruption to supplies, citing alternative sources from Italy, Chile, and the US.

It's yet another reminder of how vulnerable the world's food supplies - from treats such as Nutella to essentials like wheat - remain to climate change. Prices of coffee and cocoa have soared - buffeted by unpredictable weather. Olive oil supplies have been hit as heat waves across southern Europe have intensified. Brazil, one of the world's top crop exporters, was hit by the worst drought in its history last year.

Turkish Hazelnut Price Jumps After Frost Hits Harvest

"In recent years, especially due to climate change, temperatures have been high in the winter months and fruit trees have been waking up early," the head of the country's Agricultural Engineers Association was reported as saying. "Therefore, early spring frosts, which we did not talk about much in previous years, have now started to pose a major risk for fruit growing."

Some farmers growing hazelnuts at the highest altitudes have lost between 50% to 100% of their crop, according to Cem Senocak, who heads the National Hazelnut Council.

Political Cost

The damage to the hazelnuts could also pose a political problem for President Recep Tayyip Erdogan. 

Around 450,000 families depend on the crop for their livelihoods, concentrated in the northern Black Sea provinces that are a key stronghold of support for Erdogan, who hails from the region.

The president personally announces the price that the state grain board will pay farmers each year, and disappointing prices have, at times, translated into lost votes at elections.

The unseasonable cold snap also risks pushing up Turkey's food prices more broadly, the central bank warned in its latest inflation report, complicating efforts to rein in 35% price growth.

Seeking Profits

Still, some investors are looking for ways to profit from the shortage. Finnish asset manager Evli said it has added Turkish hazelnut processing company Balsu Gida Sanayi ve Ticaret AS to its Emerging Frontier fund, predicting that wholesale prices for the nut could rise fivefold over the next year based on an analysis of the impact of previous frosts and growing pest infestations.

Turkey's main exporter group has already slashed its forecast for this year's harvest - which runs from August to September - by a fifth to 609,000 tons.

"There simply is no place to get these missing hazelnuts from at scale until the next year's harvest in Turkey in August 2026," Burton Flynn and Ivan Nechunaev, investment advisers to the fund, wrote in a blog post last month.