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Iran’s pistachio sector is second in the world.
Iran’s pistachio sector is second in the world.

Iran, US Battle Over Pistachio Trade

Iran, US Battle Over Pistachio Trade

The international pistachio trade has faced unexpected challenges because of tensions between Tehran and Washington.
The global pistachio industry is a multibillion-dollar a year sector that is continuing to grow in value, as its popularity grows.
The US and Iran dominate the world’s trade in pistachios, collectively controlling between 70% and 80% of yearly output for the last decade, BBC reported on its website.
Over the last 40 years, Iran’s growers have faced pressures from sanctions, tariffs and restrictions on their ability to access international financial tools.
Although pistachios themselves were not on the list of sanctioned products, restrictions on global banking made trade difficult for Iranian farmers.
All that changed in 2016 following the Iran nuclear deal known as the JCPOA. The deal, officially titled the Joint Comprehensive Plan of Action, was reached between Iran on the one side and the US, the UK, France, Russia, China and Germany on the other in July 2015.
It took effect on January 16, 2016, and terminated nuclear-related sanctions against Iran in return for limits on the Iranian nuclear program.
It wasn’t just Iranian oil that came flowing back onto the international market; pistachio exports began gaining overseas markets.

 Price competition
The price of pistachios has been on the rise since 2002. Richard Matoian, executive director of the American Pistachio Growers trade association, attributes this to increased awareness of their health properties and global demand for healthy snacks.
“The industry has been pushing the products with advertising,” he says, adding that middle-class demand in developing markets has also boosted exports.
Increased demand in China has been key to the sector’s growth. Between 2008 and 2013, Chinese imports of US pistachios rose 146%, according to APG.
But the 2014 drought saw the price of California’s nuts rocket from $3/lb (453g) to over $5/lb.
By contrast, Iran’s pistachio yield that year was strong. In markets like China, they were able to undercut American prices by close to $0.20/lb.
A strong growing year in 2016 has helped the US market recover and led to a moderation in price.
But Iran has another advantage that helps it in global trade: its location. “Iran has a transportation advantage. They can certainly take markets away and China is an example of that,” says Matoian.

 Uphill March
The advantages and disadvantages for Iran are not only linked to sanctions. Iran claims its pistachios have a better taste, as do several large European distributors, though the US and Iran mainly grow the same strain. (Turkish pistachios, for example, are a different variety.)
The US also imposes a 241% tariff on Iranian pistachios, meaning even without sanctions, the US market has been all but cut off for Iran.
Water shortages are another problem for Iran. It is the major obstacle to growth for his industry.
Iran’s pistachio sector is second in the world, following the strong 2016 season in the US. And with the two countries dominating so much of the global market, Iran isn’t in dire need of a comeback.
But for the growing number of pistachio fans around the world, increased access to Iran’s pistachio exports and decreasing prices would be a sweet outcome.

 Iran’s Pistachio Exports
The Islamic Republic of Iran Customs Administration’s official statistics indicate that Iranian pistachio exports’ value decreased by 40% to earn $198 million and the volume of exports also decreased by 45% to reach 19,000 tons in the first five months of the current fiscal year (started March 21), compared with the same period of last year.
Germany was the main destination of Iran’s pistachio, as it imported 3,063 tons of pistachio worth $40 million from Iran during the five months, according to Trend News Agency.
Over 61% of Iran’s exported pistachios were dispatched to Germany, Iraq, Kazakhstan, the UAE, India, Spain and Russia,
On the whole, Iran exported pistachio to 59 countries.
IRNA cited Mohsen Jalalpour, the head of Iran Pistachio Association, as saying that about 150,000 tons of pistachios worth $1.5 billion are estimated to be exported from Iran during the current Iranian year (started March 21), to register an 11% and 25% growth in weight and value respectively compared with last year. He added that last year, 135,000 tons of the product worth around $1.2 billion were exported from the country.

 Pistachio Production
According to Mahmoud Abtahi, chairman of the board of directors at the Iran Pistachio Association, the amount of pistachio production in Iran in the last fiscal year halved to 180,000 tons, which is the main reason behind the decline in export this year, ISNA reported.
Jalalpour said every year between 8,000 and 12,000 hectares of Iran’s pistachio orchards are lost because of water shortage and soil salinity.
“Land under pistachio cultivation in Iran is currently close to 350,000 hectares while during the 2000s, the figure stood at more than 400,000 hectares,” he was quoted as saying by Eranico.
Kerman Province in southeast Iran is the country’s biggest producer of pistachio. The province once accounted for 70% of Iran’s pistachio production, but now produces only 30% of all the pistachio grown in the country due to the severe water crisis.
“Pistachio is currently cultivated in 19 provinces across the country, all of which are more or less facing the same issues,” he said.
Both Jalalpour and Abtahi estimate this year’s production to stand around 230,000 tons, of which Jalalpour expects some 150,000 tons worth $1.5 billion will be exported to register an 11% and 25% growth in weight and value respectively compared with last year when 135,000 tons worth around $1.2 billion were exported.

 

 

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