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ITALIAN HAZELNUTS, NICHE BUT QUALITY PRODUCT

ITALIAN HAZELNUTS, NICHE BUT QUALITY PRODUCT

Italy is the world's second leading hazelnut producer after Turkey, which covers about seven tenths of world demand. In 2007, 69% of world production came from Turkey and 20% from the EU. Within the EU, Italy alone covers 81% of production and contributes 14% of total world supply. The production dynamics of the two largest producers seem, however, to be diverging. While the last available data shows that hazelnut prices in Turkey have risen by 2,600 dollars per ton in just one year, prices dropped 2% in Italy from 4.80 to 4.70 Euro a kilogram between September 2007 and February 2008. And over the previous twelve months (February 2007 – February 2008) Turkish hazelnut prices grew over 50% while Italian hazelnuts prices only 15 – 17%

On the global level, the upcoming harvest is expected to be good and about 20 - 25% better than 2007. Unless hit by adverse weather, Turkey has forecasted about 800 – 850 thousand tons of hazelnuts in shells while about 110 thousand are forecasted for Italy followed by 30 thousand for Spain and about 5 thousand tons for France. These impressive figures paint a difficult picture for Made in Italy hazelnuts even though they are still accredited on international markets for their top quality: the Turkish price and quantity competition places Italian exporters in difficulty. And apprehension is growing in the traditional plantation areas, specifically Cuneo, Viterbo and Avellino: three areas that contribute 65% of Italian hazelnut production alone.

North, Center and South: the three Italian hazelnut centers are equally distributed in Italy. The most northern province, Cuneo, holds the record in Piedmont for the most land dedicated to hazelnut plantations: with about 7,000 hectares, it covers almost 89.5% of the land zoned for hazelnut cultivation and supplies almost 85% of regional production. In Piedmont, the cultivation of the “sweet round of the Langhe” was awarded “IGP” markings in 1993 (Protected Geographical Status). With about 100 thousand quintals, Piedmont production makes up for about 8-9% of the Italian total.

The southern Giffoni hazelnut also received IGP recognition the southern producers, concentrated in the province of Avellino, are sending more alarming signals: a significant drop in Avellino production was predicted for 2008 (about 50 – 55% lower than 2007) due to weather conditions, parasites and the ban on some phytosanitary products to treat the common hazel. Yet the Giffoni hazelnut has rare organoleptic properties: it is specifically suited for roasting, peeling and gauging and these qualities are highly sought after in the confectionary industry, both in the production of pasta and granulate and as a raw material for mass consumption confectionary specialties.

The hazelnut produced in Central Italy, in Lazio, is also next for controlled denomination (DOP, Protected Designation of Origin). On the regional level, the province of Viterbo is the choice area for the so-called “Roman hazelnut”: half of the 60 municipalities in Viterbo are involved in this cultivation. It is the main business in 15. In 2007, the province of Viterbo produced 480 thousand quintals of hazelnuts, ranking first in Italy despite the 11% drop from 2006 levels. The area’s 9 thousand companies employ about 15 thousand farmers. These numbers are proof of the impact a hazelnut price crisis could have on Viterbo’s economy: in the last year, producers suffered price drops between 5 and 11 percent.

Despite these difficult conditions, some signals lead us to be optimistic: in Piedmont, especially in the areas of Monferrato casalese, hazelnuts are accompanying and replacing the traditional vineyards. Hazelnut plantations managed on the professional levels have doubled in less than ten years and now 800 – 1,000 hectares are being cultivated in the province of Alessandria. Another 50 hectares were added in just the last year. These figures are still far from those in Cuneo, but the trend is marked: about 160 companies in province are now estimated to be associated with hazelnut production.

The interesting trend driving the Piedmont phenomenon is the confectionary industry demand. This is led by Ferrero, which seems interested in the new cultivations, since it is able to offer greater procurement alternatives and high product quality. Recently, Elah-Dufour, which owns the Novi brand, has explicitly stated its intention to buy from local producers in the future. These two leaders confirm that product protection and investments in high quality hazelnut varieties can provide a future for producers. All this is despite aggressive Turkish competition, which rests most of its competitive advantage on price alone.

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