Relations between the US and Iran the two have an outsized impact on the global trade in pistachios Relations between the US and Iran the two have an outsized impact on the global trade in pistachios
Oct 27, 2017

The US and Iranian battle over the pistachio nut trade




The US and Iran dominate the world's trade in pistachios - collectively controlling between 70% and 80% of yearly output for the last decade.

Over the last forty years, Iran's growers have faced pressures from sanctions, tariffs and restrictions on their ability to access international financial tools.



It wasn't just Iranian oil that came flowing back onto the international market, pistachio exports began gaining overseas markets.

Trump's threat

That progress could face challenges though. US President Donald Trump called the agreement created under his predecessor the "worst" deal the US has ever made.


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Over 90% of US pistachios are grown in California
President Trump said in the speech announcing his decision that the agreement "threw Iran's dictatorship a political and economic lifeline," but had failed to prevent Iran's "sprint" towards nuclear weapon development.

For Iran's pistachio industry the threat of losing the deal and reinstating sanctions could mean the return of what Hojat Hassani Sadi, deputy director of the Iran Pistachio Association calls "unfair and unequal competition".

Ancient roots



Over the next several decades, even in countries where Iranian pistachios were welcomed, restrictions on its companies' ability to access international financing made it hard for the industry to flourish.

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During that time the US market expanded, with farmers - mainly across California - planting the crop.

But in 2014. hot and dry weather conditions across the western US cost the industry nearly half its crop and cut profits for 2015 - the year those nuts were sold - by close to $1.4bn (£1bn).

Globally, pistachio prices rose, but for Iran's growers it was also an opportunity.

Price competition


"The industry has been pushing the products with advertising," he says, adding that middle-class demand in developing markets has also boosted exports.

Global Trade


But the 2014 drought saw the price of California's nuts rocket from $3/lb (453g) to over $5/lb.


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But Iran has another advantage that helps it in global trade - its location.

"Iran has a transportation advantage. They can certainly take markets away and China is an example of that," says Mr Matoian.

Uphill march



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Aging water infrastructure in Iran is a major difficultly for Iran's farmers
Water shortages are another problem for Iran. According to Mr Sadi it is the "major obstacle to growth" for his industry.

Iran's pistachio sector is second in the world following the strong 2016 season in the US. And with the two countries dominating so much of the global market, Iran isn't in dire need of a comeback.

But for the growing number of pistachio fans around the world increased access to Iran's pistachio exports and decreasing prices would be a sweet outcome.

 -Zoe Thomas-

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