Economy, Domestic Economy

Iran to Remain World’s Biggest Pistachio Producer

Iran to Remain World’s Biggest Pistachio Producer
Iran to Remain World’s Biggest Pistachio Producer

Iran will remain the world’s biggest producer of pistachios during the 2016-17 crop year, as production in the United States is estimated to decline, which will drag down global production significantly, according to data released by the United States Department of Agriculture.

Along with the US, Iran accounts for 70-80% of the world’s pistachio production. The two countries have been vying for the top spot as producer and exporter over the past several years.

A prominent pistachio producer since the 5th century BC, Iran managed to regain the top rank last crop year for the first time in half a decade.

Pistachios are Iran’s biggest export commodity after crude oil (and its derivatives), with 250,000 tons of the nut produced last year.

According to USDA, production in the United States is estimated to decline by nearly half from the previous year to just 122,000 tons, the smallest crop harvested in nearly a decade. The 2015-16 crop year (September 2015 through August 2016) was severely affected by inhospitable climate and drought. Although the season started with record-high stocks, the steep output drop has limited the ability of the industry to meet demand. Exports are estimated to drop by 58,000 tons to 80,000 on lower shipments to top markets China and the European Union.

The USDA sees Iran’s production decrease 20,000 tons to 210,000 this year primarily on lower yield in the top-producing province of Kerman.

Years-long nationwide drought resulting from climate change and unconstrained farming have taken a devastating toll on Iran’s pistachio farming.

In 2013, Iran’s Chamber of Commerce, Industries, Mines and Agriculture carried out a survey showing that Kerman Province was losing about 20,000 hectares (49,400 acres) of pistachio farms every year to desertification.

Iranian exports, however, are not expected to decline. As USDA predicts, Iran’s exports will remain unchanged at 190,000 tons on steady trade to China, EU and Turkey.

The Islamic Republic of Iran Customs Administration data show exports in the current fiscal year are showing signs of improvement.

According to the latest IRICA statistics, an estimated 28,000 tons of pistachios worth 8.3 trillion rials (close to $234.5 million) were exported during the first four months of the current Iranian year (started March 20), registering a 22% increase in volume and 29% rise in value compared with last year’s similar period. Meanwhile, Turkey has been a force to reckon with in the global stage. In 2015, the country increased output by some 80% to stand at 114,000 tons.

USDA estimated that Turkey’s production will further jump by 45,000 tons to 130,000 in 2016-17, which is expected to have limited effect on trade as almost the entire harvest is consumed domestically. After rising for two consecutive years, imports are expected to drop to 10,000 tons.

Accordingly, global production for 2015-16 is estimated to plunge 86,000 tons from the previous year to 529,000. As a result of lower available supplies, world consumption and ending stocks are expected to fall.

Global exports are estimated to decrease by 54,000 tons to 280,000 tons primarily due to lower shipments from the United States.