Pistachio Market Update March 2022 Week 9

The Iranian pistachio has been severely affected over the years due to different reasons, including US sanctions. The war in Ukraine has had a spillover effect for the Iranians, especially the pistachio market. The Russians have decided to take a step back from the nuclear deal with Iran over growing concerns that sanctions from the US may stimulate any formal dealings due to the ongoing Ukraine crisis. 

The Background on Iranian Sanctions

No nuclear deal with Iran results in the US reimposing sanctions on the Iranian exports, causing extreme consequences for Iranian exporters, especially the pistachio exporters. Due to sanctions, it becomes nearly impossible for Iranian exporters to conduct business transactions with foreign banks, and foreign corporations do not offer insurance on exports from Iran. The Zarandieh county in Iran has had a 19% decline in exports compared with last year. 

What Challenges are Faced by the Iranian Pistachio Market?

To add to the troubles of the Iranian pistachio market, the weather required for this product is a challenge in itself. As of now, the hope is that the current climate will prevail till the end of this month, allowing a good yield. However, any changes in weather conditions may become another setback for the Iranian pistachio industry. 

The Price Has Risen for a Number of Reasons

While all this is happening, the price of the Iranian pistachio has seen a rise due to a number of reasons. The initial was due to the overwhelming expectations that the sanctions would be lifted. 

This caused the Iranian rial to gain value against the dollar in the open market, adding weight to the export bill. While that was the case till as late as the weekend, this one would now strangle any room of price adjustments, further escalating the price. It is truly unfortunate for the general pistachio market. On numerous occasions, the Iranians have stated that they have sufficient supply already stocked up. However, they will now continue to face multiple difficulties in exporting their pistachios. 

The only positive for the Iranian pistachio industry is that the domestic demand for pistachio has seen a rise due to Nowruz (Iranian New Year) being around the corner. Though, this may only be a short term joy ride for the pistachio industry in Iran. The future looks bleak.