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Nut wars: the battle to dominate the pistachio market

Nut wars: the battle to dominate the pistachio market
17 Apr
2020
As Iran and the US slog it out to dominate the global pistachio trade, other countries look to get in on the action

Ongoing trade wars claim all sorts of scalps. From automobiles to soy beans, thousands of industries are left to fight it out across global battlegrounds. Such is the case for the pistachio.

A mainstay of Persian cuisine, the pistachio was grown predominantly in the land that is now Iran for more than a thousand years (they’re even mentioned in the Old Testament: Genesis 43:11). The country was the undoubted king of the nut, which started making its way to the wider world during the conquests of Alexander the Great. 

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Everything changed following the 1979 hostage crisis in Iran, after which the US placed sanctions on the country. The US then set about expanding its own industry. Farmers started planting in the late 1960s with the first commercial harvest in 1976 (it takes seven years for the trees to reach maturity). Since then, the pistachio harvest has increased 599 per cent and by 2017, the US share of the market was 45.4 per cent.

Nowadays, the resulting pistachio war serves as a microcosm for the US’s relations with both Iran and China. Iranian pistachios are simply not welcome in the US. As Richard Matoian, president of American Pistachio Growers says: ‘We have anti-dumping tariffs in place against the Iranian product at 241 per cent, so that pretty effectively locks them out of the market.’ Whether Iran does well elsewhere largely depends on the quality of each year’s harvest – something also under threat. Certain years see growers struggle to combat warming weather and dwindling water supplies. 

Meanwhile, China is one of the world’s biggest markets for the nut. ‘In particular, it has become a preferred gift to give during Chinese New Year,’ says Matoian. ‘The Chinese name for pistachio literally translates to the “happy nut”. It has to do with the perceived smile of an open in-shell pistachio.’ Nevertheless, as part of the ongoing trade war between China and the US, the Chinese government currently place tariffs on raw US pistachios of 50 per cent and on roasted pistachios of 30 per cent. 

This doesn’t mean the US can’t export to China, but Matoian says importers are now less likely to take large quantities: ‘Thirty per cent is significant enough for buyers to look and see if there are other sources for the product.’

Perhaps as a result of this, other countries are now getting in on the game. While Iran and the US still dominate the world’s trade – collectively controlling between 70 per cent and 80 per cent of yearly output for the last decade – this could change.

Large nut distributors are considering cultivating pistachios in countries such as Georgia, Uzbekistan, Azerbaijan, Romania, China and Australia. The two-horse pistachio race may soon be over.  Ongoing trade wars claim all sorts of scalps. From automobiles to soy beans, thousands of industries are left to fight it out across global battlegrounds. Such is the case for the pistachio.

A mainstay of Persian cuisine, the pistachio was grown predominantly in the land that is now Iran for more than a thousand years (they’re even mentioned in the Old Testament: Genesis 43:11). The country was the undoubted king of the nut, which started making its way to the wider world during the conquests of Alexander the Great. 

Everything changed following the 1979 hostage crisis in Iran, after which the US placed sanctions on the country. The US then set about expanding its own industry. Farmers started planting in the late 1960s with the first commercial harvest in 1976 (it takes seven years for the trees to reach maturity). Since then, the pistachio harvest has increased 599 per cent and by 2017, the US share of the market was 45.4 per cent.

Nowadays, the resulting pistachio war serves as a microcosm for the US’s relations with both Iran and China. Iranian pistachios are simply not welcome in the US. As Richard Matoian, president of American Pistachio Growers says: ‘We have anti-dumping tariffs in place against the Iranian product at 241 per cent, so that pretty effectively locks them out of the market.’ Whether Iran does well elsewhere largely depends on the quality of each year’s harvest – something also under threat. Certain years see growers struggle to combat warming weather and dwindling water supplies. 

Meanwhile, China is one of the world’s biggest markets for the nut. ‘In particular, it has become a preferred gift to give during Chinese New Year,’ says Matoian. ‘The Chinese name for pistachio literally translates to the “happy nut”. It has to do with the perceived smile of an open in-shell pistachio.’ Nevertheless, as part of the ongoing trade war between China and the US, the Chinese government currently place tariffs on raw US pistachios of 50 per cent and on roasted pistachios of 30 per cent. 

This doesn’t mean the US can’t export to China, but Matoian says importers are now less likely to take large quantities: ‘Thirty per cent is significant enough for buyers to look and see if there are other sources for the product.’

Perhaps as a result of this, other countries are now getting in on the game. While Iran and the US still dominate the world’s trade – collectively controlling between 70 per cent and 80 per cent of yearly output for the last decade – this could change.

Large nut distributors are considering cultivating pistachios in countries such as Georgia, Uzbekistan, Azerbaijan, Romania, China and Australia. The two-horse pistachio race may soon be over.

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