Pistachios: dangerous hypocrisy

Date: 25th January 2023 Category: Latest News
Pistachios: dangerous hypocrisy

Mundus Agri. Frustration and anger are growing with Iran’s government. Suppliers are now actively blaming the government for losing market shares for pistachios. Exports have, in fact, slumped by 75%.

Full warehouses vs. slump in exports

Although demand revived with the arrival of the new crop in mid-October and monthly exports rose by 53.5% in November (9,052 mt worth USD 60.707 million) as opposed to October 2022 (5,902 mt worth USD 39.503 million), the total figures are a far cry from the volumes shipped in previous years. Iran, in fact, exported 57,000 mt of pistachios worth USD 405.313 million in January-November 2022, which is more than 60% down on the 115,890 mt worth USD 1.042 billion registered in the same period in 2021. Yet, it should be noted that the 2021 crop suffered from frostbite, and suppliers report that the decline is far worse as exports range a staggering 75% lower than in frost-free years.

Iran has, in other words, not only lost its position as a leading global supplier, but the industry is also unusually frank in calling the government to blame. Pistachio exports earn the country more than USD 1 billion on average per year and account for more than 50% of the country’s horticultural earnings in dollar value. Only a few years ago, Iran had the world’s largest area under cultivation of around 534,000 ha and was the second largest producer. Now the country has lost market shares to the United States and Turkey, which is particularly bitter as global consumption, which ranged at 600,000 mt in 2020, is increasing yearly, especially in Turkey and India. Suppliers clearly state that the government’s self-imposed sanctions are mainly to blame for this development, which renders it impossible for them to export pistachios at present, although the warehouses are full.


Hypocrisy poses a big threat

The bizarre situation is that while the regime depends on foreign currency earnings, it successfully prevents exports. Trouble is that the government has put a complex foreign exchange system in place (NIMA), which forces exporters to return any foreign currency earnings at a 20% loss. Many have, therefore, resorted to illegal smuggling, which effectively means that the government earns less. Naturally, there are other issues such as frost, ineffective marketing, or transportation, which make things difficult. Yet, suppliers are angry with the government because they could easily compete in the global market, especially since the pistachios produced in Iran have a unique taste and quality if only the government would engage in lifting sanctions. The way things are going now, however, they can only helplessly watch how market shares are being lost, while production is on the rise in the United States and Turkey.


Downturn in prices

Although domestic prices have risen, the opposite is the case in the export market. The prices for most varieties have declined by 5.0-6.5% since mid-December as the Iranian rial has depreciated sharply. Kale Ghuchi pistachios are, however, trading a more moderate 1.5-2.0% lower in the international market as supplies are lacking, which caused prices to rise sharply in the domestic market.