Azerbaijan boosts hazelnut planting, processing and exports Review by Caliber.Az

The export of fresh fruit and vegetable products to the markets of post-Soviet countries has been playing the role of a driving force for many years, ensuring a steady increase in production in the dynamically developing agricultural sector of Azerbaijan. In agriculture, there are several areas where our country is unequivocally recognized as a leading global exporter, and such a sector is the production of hazelnuts. Azerbaijan ranks third in global hazelnut supply and also aspires to become a leading exporter of hazelnut seedlings in the CIS. Hazelnut production in the country is expanding, with new orchards planned in the Karabakh region. Exports to foreign markets are also on the rise, with exports of hazelnut growing by 12% in the first 11 months of 2022, according to the State Customs Committee.

As far back as the Middle Ages, Azerbaijan was mentioned as one of the well-known suppliers of hazelnuts, chestnuts, walnuts, almonds, and pistachios. The unique soil and climatic conditions at the western slopes of the Greater Caucasus in the Oguz, Gabala, Sheki, Gakh, Zagatala, and Balaken regions as well as in the southwestern spurs of the Lesser Caucasus and the Absheron Peninsula have always favored the cultivation of various nut crops. Nevertheless, it was not until the 1930s that nut orchards began to be cultivated on an industrial scale and a nut-processing industry was established. Since then, our country, along with neighbouring Georgia and subsequently Ukraine, has provided almost the entire volume of the confectionery enterprises of the former USSR with different types of nuts.

It is noteworthy that unlike other monocultures of national agriculture - viticulture, cotton-growing, tobacco-growing, and tea-growing, which were in decline during the first decade of the country's independence, the sphere of growing and processing of nuts has revived quickly enough. This was facilitated by the preservation of the main assets - nut trees and processing facilities, the modernization of which required little capital investment. At the same time, in the 21st century Azerbaijani nuts, and first of all hazelnuts, turned out to be in high demand abroad, which ensured high industry profitability.

Despite some decline in volumes during the coronavirus pandemic, global trade in nuts, which reached $32 billion in 2021, has partially recovered the lost demand. Walnuts, hazelnuts, almonds, and pistachios accounted for the bulk of shipments in this segment.

Among nuts, hazelnuts have the highest export interest, with seven countries producing them on an industrial scale. In total, just over 743.4 thousand tons of hazelnuts are produced globally each year, with a high level of concentration in trade. The largest producer and exporter of hazelnut is Turkey, which accounts for over 70% of global production and about 75% of exports. The remaining 25% of the trade is shared by Italy, Azerbaijan, the USA, Chile, Georgia, and Iran. The main consumer of hazelnuts in the world is the confectionery and food industry (producers of nut and chocolate paste) of the European Union, which accounts for four-fifths of all hazelnut purchases.

Today, Azerbaijan is the world's third-largest exporter of hazelnut, accounting for around 3% of global production. Azerbaijani hazelnut and its semi-finished products are exported to CIS countries, Europe, and the Middle East. Russia, Switzerland, Italy, and Poland show the greatest interest in our products. Some importers even introduced zero customs duties for the import of Azerbaijani hazelnut, the organoleptic quality of which is recognized as one of the best in the world.

On December 22, Azerbaijan's State Customs Committee (SCC) disseminated data on foreign shipments of hazelnuts, according to which in January-November, 2022 the republic exported 18,991 tons of nuts worth $97.485 million, which is 12% more in quantitative terms.

However, there is more to come, as Azerbaijan is gradually implementing large-scale projects to expand hazelnut and almond plantings, including in the Karabakh region, while new processing facilities are being built.

"We have more than doubled the area of hazelnut orchards and now the republic is the third largest exporter of hazelnuts in the world. But unfortunately, almond production in Azerbaijan was very low and did not meet domestic demand. Therefore, today the country should increase the cultivation of almonds", Ilham Aliyev, President of Azerbaijan, said not long ago. According to the head of state, in order to increase the production of almonds, which also have significant export potential, new orchards will be planted in the Absheron Peninsula and other regions of the country. This work is already underway, and in the first phase in 2017-2019 different varieties of almond trees were planted on a total area of 427 hectares in the villages of Qala and Bilgah, and an almond processing plant was built.

In general, the production of nuts is developing in other regions of the country, especially given the high export demand from Italy, Germany, Austria, Switzerland, France, Poland, Türkiye, UAE, and a number of other countries for Azerbaijani hazelnut and, in the future, almonds. In this connection, a number of Azerbaijani companies have already applied to the relevant authorities for establishing hazelnut, walnut, and chestnut plantations in the territory of Azerbaijan liberated from occupation: the most favorable conditions for these crops are in the foothill areas of Eastern Zangazur - Zangilan and Kalbajar.

"The Ministry of Agriculture together with Azerkosmos identified 4,500 hectares most favorable for the cultivation of hazelnut, engaged farmers, and they began planting hazelnut crops in the territories liberated from the occupation. Since hazelnut orchards are mainly planted on the hillside, it was decided to localize plantations on the territory of Khojavand, Zangilan, and Gubadli districts," head of the Department of Land Control of the Ministry of Agriculture Firudin Tagiyev said.

It is noteworthy that in recent years Azerbaijan acts not only as a nut exporter, but a number of local structures (including a pilot agricultural park in Yevlakh) also act as suppliers of seedlings of highly productive nut trees, which are being delivered to Kyrgyzstan, Russia, and Georgia. A separate agreement has been signed with Uzbekistan, under which, in addition to supplying high-yield hazelnut seedlings, Azerbaijan provides training to Uzbek specialists in advanced hazelnut cultivation techniques. In general, the Azerbaijani government encourages hazelnut entrepreneurs by allocating one-off funds of 4,400 manats to farms annually.

Given the high export demand, a number of Azerbaijani companies are expanding investments in the construction of new facilities for processing hazelnuts and other nuts: such a facility will soon be built in Khudat, Khachmaz region, and another factory is being built in Zagatala.

The commissioning of new processing plants with modern technology for processing and storing raw materials and finished products contribute to compliance with quality standards and will improve the consumer qualities of Azerbaijani hazelnuts. All of this is extremely important since complaints about the storage conditions of hazelnuts have periodically led to a ban on their export to European Union countries. The fact is that some batches of peeled hazelnuts exported from Azerbaijan were found to have increased levels of the toxic substance aflatoxin. This organic compound is formed in kernels of nuts under the influence of mold fungi as a result of improper transportation and storage in conditions of high humidity. This is primarily due to improper storage of the harvested crops, and partly due to inadequate management of the procurement of raw materials from the processing companies.

Today, such force majeure occurs less frequently, as local companies are implementing modern methods to control temperature and humidity in storage facilities and are complying with product storage rules. In order to improve the quality of products the processing enterprises of the republic actively cooperate with the Food Safety Agency of Azerbaijan (AQTA), the UN Food and Agriculture Organization (FAO), the Swiss laboratory SGS, and other reputable international structures. In particular, FAO is working with the Azerbaijani government to develop the hazelnut industry and expand nut exports.

"Azerbaijan has significant demand for advisory services in the field of hazelnut production and export, and since 2020 FAO has been implementing the project 'Acceleration of efficiency and sustainability in hazelnut production in Azerbaijan - HAZER' aimed at accelerating the production of this product," said Head of FAO Office in Azerbaijan Melek Chakmak in April this year.

The next stage of the project has been underway since the spring of this year, and in addition to the hazelnut production process, farmers also participate in various activities related to the application of advanced industry experience.