May 7, 2015
As talks between Washington and Tehran advance toward a resolution of a decade-long nuclear dispute, and lifting of sanctions by the June 30 deadline, a large disruption of the global pistachio market could be in the offing.
Although Iran ranks as the world’s seventh biggest oil producer, it is a serious rival with the U.S. as the world’s top producer of pistachios. Once talks conclude, and the long-standing sanctions are lifted, the country could flood the market with pistachios, causing traders to predict a fall in prices.
Nowhere will it be felt more than in California. In the decade that Iran has been sequestered from the market, California growers have doubled pistachio acreage, and since 2004 have tripled output, reaching 513 million pounds last year according to the U.S. Administrative Committee for Pistachios.
For consumers however, a lifting of sanctions would be good news after prices have increased by 40% over the past five years due to tight supplies, making pistachios one of the most profitable permanent crops. In 2014, the U.S. crop was worth approximately $1.3 billion, and would be worth about the same to Iran, however the revenues would be more significant for the country, as pistachios are its second biggest export after crude oil.
Over the past 30 years the U.S. has banned, and then lifted bans, on Iranian pistachios multiple times beginning in 1979 following the taking of the U.S. embassy in Tehran and the hostage crisis. Subsequent bans were enacted in 1987 during the Iran-Iraq war, and again in 2000 by President Obama.
Iran has retained its pistachio market share in China, India, and Turkey, but has not been successful in selling pistachios in Europe due to additional Western sanctions designed to stop gas and oil trading also limiting Iran’s access to banking and shipping according to traders.
Iran is reportedly eager to reignite its commodity production and re-enter global markets, but the California pistachio industry remains unfazed, stating that the country will find it difficult to gain entry to the U.S. or European markets because of aflatoxin contamination caused by fungus.
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