Spend Matters welcomes a guest post from Abigail Green at Mintec.
During the past year, we’ve looked at a variety of different nut markets (including peanuts and hazelnuts) and it now seems like a good time to look at the global pistachio market, given the US and Iran are jockeying for top spot as the world’s largest producer.
The US will continue to be the major supplier to global markets. In February 2013, the Iranian government had announced a ban on exporting pistachios until the new crop begins to arrive in August, in order to try and boost domestic availability and lower domestic prices. But due to a backlash by producers, this ban was lifted after only week or two. Despite the lifting of the ban, it caused concern in the market about the security of Iranian supply, and some buyers moved to US produce in order to avoid any potential future restrictions.
A poor crop in 2011/12 in both the US and Iran, the two largest global exporters, meant supply was limited throughout the majority of 2012, causing prices to rise. In anticipation of a new and better crop in summer 2012, buyers held back, causing demand and prices to fall. However, once the new crop began harvesting, demand picked up causing prices to rise from September until the end of the year. Demand then weakened, and with US supply plentiful, prices fell.
The reason global pistachio prices have been falling since the start of the year as is that all the world’s largest producers have moved into the high yielding year of the biennial pistachio cycle. The US, Iran, and Turkey are all currently experiencing good crops, and global production for the 2012/13 season is estimated to be up by 33% y-o-y. Production in the US is estimated to be 0.25m tonnes, up 24% on 2011/12, whilst Iran is expected to reach 0.20m tonnes and Turkey 0.13m tonnes, up 25% and 150% y-o-y respectively.
As a result, the US will be the world’s largest exporter for a second consecutive year, with estimates placing US exports at 0.18m tonnes, up 15% y-o-y and reaching 53% of global exports. Initial estimates for the 2013/14 US crop show a production of 0.22m tonnes. Whilst this is a 12% y-o-y fall, it is still a very high figure for a low yielding year in the biennial cycle, as more orchards will enter full production. In past low years, US production has struggled to reach 0.2m tonnes.
With Iran and Turkey also both expected to return to the off year in their biennial cycle for 2013/14, it seems likely that the US will remain the largest supplier of pistachios in the global market.