Nutella Hazelnuts: Orchards of Chile

image of Nutella de Avellanas cosecha propia en Chile

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New Chilean hazelnut plantations – 17,000 hectares – represents only 1.5% of the global supply but a steady increase in production and the number of hectares planted is expected. The big incentive for this new market is the excellent current price of USD4.7 per kilo, where the past price of USD 3.00 per kilo meant a return of USD5,000 per hectare. High profitability means leading farmers in this new industry will have very buoyant bank accounts.

Hazelnut is a tree native to Asia, and for centuries has been planted from the north of England to Iran and Turkey in the south. There are hazelnut orchards throughout Europe.

The world’s largest hazelnut producer is Turkey, with 64.5% of the world’s total production with an annual production of 581,000 tonnes in the past seven years, according to different sources, followed by Italy, Azerbaijan, Georgia, the USA, Spain, Greece and others.

The large demand for hazelnuts by Ferrero – a famous Italian company with great worldwide success that became established in Chile in the 90’s – has been consistent over the years. See the report of the La Tercera Journal.

In 2014 there was a considerable drop in production, due to climatic causes in Turkey, which caused some commotion amongst consumers of hazelnuts, especially in the form of Nutella, a mixture of chocolate and hazelnuts from the Ferrero Company.

In early July 2016, the Minister of Agriculture for Turkey announced a harvest of 468,000 tonnes this year. Such a figure, even when issued by a government authority, is not credible for most international retailers, especially in London.

Nowadays, it is difficult to predict prices for hazelnuts, at least for the current season. Taking into account the devaluation suffered this week by the local currency of Turkey, one might expect a lower price on the international market.

Likewise, if the political situation in Turkey alters the normal output of the crop, there would be shortages, and therefore a rise in prices. The international market for hazelnuts – this time affected by the political situation ( an attempted military coup ) – has no assurances for the moment, while recognizing that the demand is growing every day.

Comparative advantage of planting hazels

The main attraction is the low dependence on local labour. The harvest can be mechanized. This is not a minor detail in a country where various fruit crops harvest dates coincide each year. Many producers rely on a 100% manual harvest, such as in the case of berries and grapes.

Another advantage is the value of investment per hectare – one of the lowest amongst fruit orchards – being around USD7,000 per hectare.


This is all very well, but what are the obstacles and complications for the conversion of farmland to produce hazelnuts, even when the figures are so extraordinarily good, is considered to be the “Ghost of the Kiwifruit”.

In the 80s in Chile, many vineyards were uprooted, and so-called “green-gold” Kiwifruit was planted by growers attracted by the exceptional price of Kiwifruit at the time. Then the price of Kiwifruit fell well below production costs, resulting in ruin for many farmers, especially those who had recently planted and had high-interest loans.

The lesson is not easily forgotten.

Nutella hazelnuts home-grown in Chile

Agrichile, the company controlled by Ferrero, will send to their factories this year between 6,500 and 7,000 tons of home-grown hazelnuts from Chile. Also, as buyer power, it will acquire a total of 8,000-8,500 tons from small and medium local producers.

3hazelnutCharacteristics of hazelnuts

Like almonds and walnuts, hazelnuts are rich in protein and unsaturated fats. They contain vitamin E, Thiamine, Magnesium, Manganese and Copper.

Hazelnut oil reaches the same heights as olive oil quality. At the same time, all hazelnut products are marketable.

It does not contain gluten, so, as flour, it is possible to prepare pasta and pastries, traditionally made from wheat flour or rice.


4hazelnutThe hazelnut tree is almost perfect: it consumes few resources, and reduces soil erosion and nutrient runoff.

It has a shelf life of 30 years and does not require pesticides.

It is profitable for stakes and even as wood to make furniture, as well, for its extraordinary flexibility before drying.




The Butterfly effect on the marketplace of Hazelnuts

The expansion of consumption in Canada exceeds double digits and in the United States there is also a great potential for growth, with the large increase in the worldwide consumption of hazelnuts.

Agrichile has invested more than $100 million in Chile, including a peeler plant, enabling the export of hazelnuts ready to be processed in Ferrero factories. They have 23 in the world, including a new one in China, where its products are very well received.

Moreover, Ferrero has planted 2,000 hectares in Australia and 300 more in Argentina – the latter where it was stagnant over the past few years due to political issues, and they are also beginning to plant in South Africa.

However, recent events in Turkey, as well as any weather effects occurring across the planet, necessarily affect the price of hazelnuts for this season and next.

For now, the hazelnut market in Chile has a large buyer, which alone accounts for 90% of demand, an excellent buyer with high labour requirements, social responsibility and environmental concern. Every day, many Chilean farmers are willing to meet those demands, not very different from other buyers of Chilean fruit.

The entry of other players into the market is expected for the medium term. Mono-dependence for the Chilean participants has resulted in very bad experiences in various agricultural sectors in the past.

So far, all who have tried to compete against Ferrero’s buying prices have failed to be competitive.

From this perspective, Chilean farmers are already thinking about partnerships to develop part of their production in the form of hazelnut oils and flours, so as not to depend on the variations that hazelnut prices have as raw material.

The future market for hazelnuts worldwide is seen to be promising. There is a persistent increase in the consumption of nuts, especially due to the recommendations of the Mediterranean diet, which values nuts as a source of energy and quality nutrients.

Specifically in Chile, as the hazelnut market evolves and acquires maturity on its way to reaching its extraordinary potential, it will be able to definitely put to rest the Kiwifruit ghost.

English Editor: Audrey van Ryn
Writer & Translator: Mª Verónica Brain

Contact the Gateway to South America team to learn about the best investment opportunities in the region. The company is a benchmark for foreign investors wishing to invest in Argentina, Brazil, Chile, Paraguay, Peru and Uruguay, providing expert advice on property acquisition and investment tours.

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