Pistachios: suppliers ditch gloss

EU steps up buying in Turkey and Iran

Iran certainly is losing out this year. While the country’s pistachio exports have slumped by 60% to as little as 29,985 mt between January and May, United States year-to-date exports were 14% up on last season in May. US overseas shipments, in fact, climbed to 191,728 mt in May as the Administrative Committee for Pistachios reports. Although Turkey witnessed an off year in terms of production last year as the crop declined to 89,000 mt, the country is regarded as an emerging market with high potential, especially for Europe.

The EU’s import figures for pistachios, however, not only credit this notion but also highlight Iran’s importance. While the United States are the leading supplier by far for the EU, shipments only rose by 13% to 76,099 mt in 2021. Iran may have a much smaller market share, but shipments from here to the EU rose by a more impressive 24% to 18,809 mt. Turkey even managed to quadruple shipments to the EU. The volumes shipped from here to the bloc, however, range much lower than the volumes shipped from the United States or Iran. Total shipments to the EU rose by 15% in 2021 driven by the pandemic prompting consumers to spend more on healthy snacks.

Prospects far from encouraging

Things are quite different this year. Inflation coupled with high energy and fuel costs will weigh on demand this year, especially in Europe as consumers will be forced to cut spending on non-essential goods. As production slumped to an estimated 135,000 mt last year, suppliers in Iran also have less stocks at their disposal and since US production exceeded 500,000 mt in 2021 it is presently impossible for them to compete with their colleagues in California. Spring frosts have also caused extensive damages in many parts of the country. Although there are official guesstimates that production will, nevertheless, rise to 200,000 mt, concerns over this year’s production prevail and it is estimated that production will continue to range at 135,000 mt in the next few years.

Although Iran holds many advantages, local suppliers are anything but optimistic. The main advantage is the diversity and unique taste of the pistachios grown here. Iran produces around five different types of pistachios in various different sizes in as many as 27 provinces. Although exports have slumped, the silver lining is that international demand for kernels is on the rise and the market share of kernels ranges higher than last year in terms of the volumes exported. Customers are prepared to pay for the distinctive taste of Iranian pistachio kernels, especially in Germany, which acts as the main supplier within the European Union. Growers have, in addition, rendered production more effective in recent years and have for instance switched to drip irrigation, which requires less water.

Water stress

Yet, suppliers emphasise that water and other issues are a great problem. Although pistachios are perfect for growing in dry conditions, drought will certainly pose a serious threat for production. Problem is that if there is not enough water production cannot develop. Another issue is that pistachios are mainly exported in bulk since import and customs tariffs for packing are too high. This generates less income and less potential for the industry. The economic sanctions and lack of reliable official estimates also render transactions with suppliers in Iran more difficult than in the United States.

Water stress may also be a big problem in California, but suppliers are much more optimistic here. Growers certainly have to deal with rationed water supplies this year and yet reports reveal that they have so far successfully adapted to persisting drought. Unofficial estimates state that production will range at 453,592 mt this year, which is around 15% down on last year. Prices in Iran have, meanwhile, remained firm over the last two weeks, which is regarded as a welcome break to the continuous rise in recent months.

*Please note that these reference prices apply to an order volume of 1 mt. Prices may range lower for higher volumes.

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