Pistachios: The other U.S.-Iran conflict

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There are a lot of victims in international conflicts, but this is crazy, you might say – although, strictly speaking, the pistachio is a seed.

The international pistachio trade in the face of unexpected wind due to the tensions between Iran and the United States.

The global pistachio industry is a multi-billion-dollar-a-year industry continues to grow in value as its popularity as a food is growing.

The United States and Iran dominate the global trade in pistachio together, controlling between 70% and 80% of the annual power for the last ten years.

In the course of the last forty years, Iran, breeders faced the pressure of sanctions, tariffs and restrictions on their ability to access to international financial tools.

Although pistachios were on the list of sanctioned products, the limitations of global banking made trade difficult for the Iranian farmers.

All that changed in 2016, after the Iran nuclear deal, officially called The Joint action program (JCPOA). This agreement with the United States and its allies removed the sanctions.

It was not only the Iranian oil that came flowing back, on the international market, pistachio exports are gaining in the overseas markets. Trump’s threat

Progress challenges, but. US President, Donald Trump, the agreement, made under his predecessor-the “worst” deal of the USA ever.

In October, he decertified the agreement. The procession passes the responsibility to the US to rate the Congress and determine whether he believes that Iran is compliant with the regulations and if intended to remain with US, in the offer.

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President Trump said in the speech announcing his decision that the agreement “threw Iran is a dictatorship, the political and economic lifeline,” but had failed to prevent Iran, the “sprint” in the direction of nuclear weapons development.

For the Iranian pistachio industry to the risk of losing the deal and the reinstatement of sanctions could mean the return of what Hojat Hassani Sadi, Deputy Director of the Iran Pistachio Association calls “unfair and unequal competition”. Ancient Roots

The pistachio industry in Iran goes back thousands of years. By contrast, pistachio agriculture in the United States began in the 1930s with the Persian seeds.

The boom in commercial pistachio cultivation came after the US severed ties with Iran after the 1979, hostage-taking, after which the US and its allies, sanctions against Iran.

Over the next several decades, even in countries where Iranian pistachios were restrictions located on their companies ‘ ability to thrive in the access to international financing, it is difficult for the industry.

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During this time, the US market has expanded, with farmers – especially in California – the planting of the crop.

But in the year 2014. hot and dry weather across the Western United States cost the industry almost half of his harvest and cut the profits for the year 2015 – the year, the ones that were sold to nuts – of the close to $1.4 billion (£1 billion).

Global, pistachio prices rose, but for Iran, the breeders, it was also an opportunity. Price Competition

The price of pistachios is on the rise, since 2002. Richard Matoian, executive director of the American Pistachio Growers (APG) trade association, this leads to an increased awareness of their health properties and the worldwide demand for healthy snacks.

“The industry has urged that the products with the advertising,” he says, adding that the middle-class demand in emerging markets, also increasing exports.

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Increased demand in China was the key to sector growth. Between 2008 and 2013, Chinese imports of U.S. pistachios, rose 146%, according to APG.

But the 2014 drought saw the price of California walnuts, rocket from $3/lb (453g) to more than $5/lb.

In contrast, Iran’s pistachio yield this year was strong. In markets such as China, they were able to under American prices, of close to $0.20/lb.

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A strong growth in 2016 has helped the US market recover, and led to a moderation in the price.

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

“Iran has a transportation advantage. You can be sure the markets take away, and China is a good example,” says Mr. Matoian. Uphill March

The advantages and disadvantages for Iran with sanctions. Iran claims its pistachio nuts have a better taste, as several large European distributors, even though the US and Iran grow, especially the same strain. (Turkish pistachios, for example, is a different variety.)

The United States imposed a 241% tariff on Iranian pistachios meaning even without the sanctions, the US market has all but cut-off for Iran.

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Lack of water is another problem for Iran. According to Mr Sadi, it is the “main obstacle to growth” for its industry.

Iran – pistachio-sector, second in the world after a strong season in 2016 in the United States. And with the two countries dominated, so do not need much of the global market, Iran, urgently, is making a comeback.

But for the growing number of pistachio fans around the world better access to Iran’s pistachio exports and falling prices would be a sweet result.