Turkey’s economic crisis threatens Nutella supply chain
There is an economic crisis in one part of the world, and everywhere else homemade pancakes are in danger.
The place is Turkey, where a far-fetched and widely criticized monetary policy has erased half the value of the local currency this year. New data shows pressure buckling is the world’s largest hazelnut industry, which keeps global Nutella supplies afloat.
Goodbye to history
Turkey’s hard-line president Recep Tayyip Erdoğan has ordered a series of rapid interest rate cuts since September, insisting against virtually all established economic logic and hundreds of years of data that it will create at the times economic growth. and reduce inflation. Good luck in stopping him: he fired every member of the government who dared to denounce his unorthodox plans, including several central bank chiefs.
The result of Erdoğan’s policies – unsurprisingly to anyone with minimal economic knowledge – was a surge in inflation and a generalized economic crisis. The Turkish lira has lost 40% of its value against the dollar since September, making it one of the worst performing investments in the world. And at the center of all this madness is the world’s largest hazelnut industry, which is caving in under the pressure:
- The cost of seeds, pesticides and fertilizers – the latter of which have tripled from $ 215 per tonne in 2020 to $ 650 per tonne this year – has made farming too expensive, and some farmers have already closed their doors and went to work in textile factories.
- Turkey’s hazelnut industry supplies 70% of the world’s supply while Ferrero, the Italian company that makes Nutella, buys 33% of Turkish hazelnut exports.
“The world is on the brink of a nut shortage,” said Turgan Zülfikar, export consultant for Turkish companies. the Wall Street newspaper. “If you’re a Nutella fan, you better stock up on supplies on your next shopping visit.”
Try, try again: Erdoğan does not stop. Turkey’s crisis worsened further on Monday when he called for more interest rate cuts – the pound lost 6% Following due to a sale by an investor. In the meantime, expect plenty of dark chocolate deals at trendy Brooklyn creperies.