turkish lira one use

A drastic fall in the Turkish lira means the price of some imported ingredients are falling despite sterling’s devaluation in the wake of the Brexit vote.

Turkey, a major supplier of dried fruit and nuts to the UK market - particularly sultanas, apricots and hazelnuts, has suffered a steep fall in the value of its currency, which has plunged 28% against the US dollar over the past year.

Sparked by rising inflation and political tensions, the lira’s depreciation began in earnest after Turkey’s failed military coup in July, reaching an all-time low in the second week of this month. Meanwhile, sterling has strengthened 11% year on year against the lira, driving down the cost of key dried fruit and nut imports - some of which have fallen further because supplies are expected to be plentiful this year.

Turkish sultana prices have tumbled 12% year on year in sterling terms. Production is forecast to reach 300,000 tonnes in 2016/17, up 55%. Favourable weather has boosted output despite a brief heatwave in June, which resulted in sunburned fruit at some vineyards.

In addition, Turkish dried apricot prices declined 9% over the 12 months to in January. Output will rise 11% at about 100,000 tonnes, with carry-in estimated at 10,000 tonnes, it has been predicted - though there are concerns the final volume could be lower than expected due to rain damage.

Meanwhile, hazelnut prices remain unchanged in sterling terms. Production in Turkey has been estimated at 580,000 tonnes for 2016/17, down 17% year on year, but high carry-in stocks, estimated at 120,000 tonnes, make up for shortfall.

The lira is set to stay volatile while Turkey waits for its constitutional referendum to take place in the first half of 2017.