The past 2 weeks has seen extreme volatility and ultimately weakness in the Turkish Lira. This is caused by government policy to reduce interest rates despite an accelerating rate of inflation. The government have stated many time over the past month that they will not increase interest rates and that they will continue to cut them hence the collapse in the value of the Lira.
So with the Lira some 35% lower against the $ than a month ago, how come apricot prices are increasing ?
Primarily it is the lack of supply, the crop is short, there was no carryover, there is virtually no uncommitted stock left. It does not matter what the exchange rate is if there is nothing to buy.
There was a brief dip in the market when the currency first fell, but after a few days this triggered buying from uncovered importers and packers, and the lira price increased sharply as packers tried to cover in a market with almost no supply.
Apricots are an export commodity and therefore all the players in the market from the grower up follow daily exchange rates. With inflation expected to exceed 30% (if it hasn’t already), and the Lira in free-fall, who would sell their stock for Turkish Lira?
We don't expect any weakness in the market in the medium term.