Iran’s Pistachio Woes Continue due to Frost Damage and Decreasing Prices

Widespread Frost Damage

Iran’s pistachio crop has suffered damage from unseasonably late frost for the second year in a row as pistachio and other fruit orchards suffered under a cold spell earlier this month. There is wide speculation as to the extent of the damage, but it will only become clear in the coming months.

According to the Agriculture Commission of Kerman Chamber of Commerce’s Mohammad Reza Mousavi Torabi, the late frost damaged pistachios on more than 180,000 ha and three-fifths of these orchards could experience a 50% decline. Pistachio production could drop by 65,000 mt according to the statement. If this decline in production is indeed as much as the ACKCC recon, it would be significant given that the 2021/22 crop was only 135,000 mt. Speculation on the extent of the damage and the size of the 2022/23 crop will most likely continue until the Iran Pistachio Organization’s first crop estimate, due out in July, will give some certainty.

Long Term Production Declining

This year’s cold spell over Iran’s pistachio areas seems to be a carbon copy of last year’s events. The 2021/22 crop was damaged by frost in late March and early April and there was also a wide range of estimates related to the damage. The IPO’s 2021 crop estimate, released in July, pegged production at 150,000, which was later finalized to 135,000 mt. This would be the third time in only 5 years that a large part of the crop was ruined by unusually late frost. Production in 2018/2019 was only 52,000 mt after frost during the later flowering stages in April, wiped out up to 70% of the crop. Pistachios are alternate bearing nuts, meaning an on-year, when yields are high, is often followed by an off-year, with low yields. Iran’s production has been erratic even taking into account the alternate bearing cycle. Adding a linear trendline to production over the last ten years reveals that it is in fact decreasing, whereas the area under bearing pistachios is increasing. The total pistachio bearing area in Iran is 336,700 ha, up from 300,000 ha three years ago. The drop in production, despite an increasing area, will be a major concern for the pistachio industry in Iran.

*Bearing area for 2012/13 not reported by IPO

Prices not Making up for Lower Exports

For the first half of the marketing year, Iran exported 71,029 mt of pistachios (on an in-shell basis), less than half of the 144,395 mt exported over the same period in 2020/21. The lower exports are mostly due to lower production, but the drop in exports to China, traditionally Iran's biggest market, will be worrisome. Exports to China dropped to only 18,649 mt for the first 6 months of the marketing year, compared to 66,914 mt over the same period in 2020/21. China’s rigid control measures for Covid-19 and the strict testing of all food shipments arriving at harbors for the novel coronavirus have led to a drop in imports, particularly in the nut market

While total exports are less than half of what it was last year, prices did not increase significantly to make up for these losses. In fact, Tridge Wholesale Price Data shows the price of pistachio dropped by 25% since Iran’s marketing year started on September 21st. Prices are down 16% YoY after having traded higher between May and January.

*Exports from Iran are reported according to the Persian calendar