Ferrero’s Australian hazelnut plantations feed global demand
The expansion of Italian food giant Ferro into growing hazelnuts in south-western New South Wales is helping to feed global demand for the company’s hazelnut products.
Ferrero, which is a private family-owned company, has global manufacturing operations and is best known for its hazelnut Nutella spread and Ferrero Rocher hazelnut chocolates. The company has long relied on Turkish grown hazelnuts for its products.
Price volatility and tight supplies in Turkey however appears to be losing Turkey’s grip on this lucrative $US 2.8 billion global supply industry.
Turkey currently produces 70 per cent of the world’s hazelnuts. A strain in its supply chain or high prices could leave buyers such as Ferrero vulnerable.
This lead Ferrero to look for a new reliable source elsewhere for hazelnut supplies.
In Australia, a Ferrero subsidiary, Agri Australia, has planted 900,000 hazelnut trees on 2000 hectares of land in South-West New South Wales since 2014.
A spokesman for the Hazelnut Growers of Australia has said that Ferrero are helping growers through research and with the practicalities of hazelnut growing.
The company has also contributed towards a project in Ottawa, Canada, where 25,000 acres of hazelnuts trees will be planted by 2027.
In 2014, a cold snap damaged Turkey’s crops, causing hazelnut buyers into panic.
Ferrero has since diversified where it procures its hazelnuts, with a Ferrero spokesperson describing the strategy as not being driven by short-term events.
Ferrero have also said they still expect Turkey to remain a major producer.
Hazelnut prices fluctuate quickly
The price of hazelnut kernels can fluctuate enormously in just a week.
In the U.S. they currently sell for $US 5, 600 per tonne, down from more than $US 17,000 in 2015, according to Freeworld.
The profitability of hazelnut farming is high, with the product ten times more lucrative than corn in Canada.
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