Pistachios: hard choices

TEHRAN. As accurate statistics on Iran’s annual pistachio production are lacking, it is challenging to issue reliable forecasts. The fact, however, is that spring frosts have caused extensive crop damage in the past two years and that farmers have lost large amounts of money. Yet, water scarcity is the most serious threat as growers are already confronted with the harsh realities of climate change. (Mundus-Agri)

Production at the high cost

While Iran’s pistachio production peaked at around 265,000 mt in 2007, such volumes have become unimaginable as more and more water resources are drying up in traditional pistachio-producing areas. Drought and water scarcity have certainly reduced output in Kerman and other leading producing provinces in recent years. The problem is not only less rain but also lower underground water levels, which render it impossible for growers to step up production no matter how swiftly they adapt to the changing climate.

The reality is that pistachio production comes at an increasingly high cost as the nuts are grown in areas that are confronted with severe water stress. Even suppliers emphasise that the situation is so bad that if the production of crops requiring water continues in such areas living there will become impossible. The only upside is that water scarcity has put enormous pressure on producers to modernize and to better observe scientific, empirical and economic principles in planning, growing and harvesting pistachios. They now use water more resourcefully by producing higher yields per cubic meter of water they consume. Nevertheless, the amount of water that is required to produce pistachios renders profitability and foreign currency imports essential for the market.

Low inventories

Although predictions are difficult, it is certain that this year’s production will range even lower than last year. The Iranian Pistachio Association, for instance, states that production will fall short of the 135,000 mt harvested in Kerman, Yazd, and Fars provinces the previous year. Iran’s total output ranged at 150,000 mt in 2021/2022, of which 100,000 mt have been exported. As domestic consumption should range at 25,000-28,000 mt, exporters will only be able to ship around 20,000 mt. Shifts in production, along with exchange rate fluctuations, prompt exports to change every year. Iran exports about 85% of its pistachios to the Far East, the European Union and India as well as the Commonwealth and the Middle East.

Although the Iranian rial has lost in value against the euro and the US dollar in recent months, the export prices for pistachios have nevertheless risen. Issue is the sharp decline in market inventories coupled with the anticipated reduction in this year’s production, which have driven up prices in the domestic market. Prices have risen by 1.5-2.5% in the last two weeks.