Pistachio Prices Retreat on Favorable Weather and Expectations of a Large Global Crop

Pistachio prices in Europe declined in mid-March due to positive global production expectations, with both small and large-sized pistachio kernels experiencing a 1.4% drop in Italian wholesale markets. The United States is anticipating a record pistachio crop in 2023 on the back of new plantings coming into production and favorable weather. Weather conditions over Turkiye and Iran have also been normal to favorable.
Pistachio prices in Europe decreased in mid-March due to a positive global production outlook. The prices of both small- and large-sized pistachio kernels in Italian wholesale markets dropped 1.4% WoW to USD 13.59/kg and USD 15.76/kg, respectively. Since September 2022, pistachio prices have been trending higher, driven by a slightly improved economic outlook. Prices reached their highest levels since the beginning of the year in the first week of May but then retracted due to normal to favorable conditions prevailing in California, Türkiye, and Iran. The United States is anticipating a record pistachio crop, thanks to mostly favorable weather conditions. 2023 will be an "on-year" in the bi-annual production cycle of pistachios, following reduced production in 2022. It is still too early to provide accurate crop estimates as the trees are currently in the pollination phase. However, with sufficient chill hours during winter, replenished groundwater after heavy early-year rains, and ample snowpack to replenish water reservoirs upon melting, conditions are positive. In line with the bi-annual production cycle, the US achieved a record crop of 528K mt in 2021, followed by a production decrease to 386K mt in 2022. It is projected that over 70% of the global pistachio crop in 2023 could come from the US, making it the main price driver. Conditions in Türkiye have also been mostly normal to favorable; however, it is currently an "off-year" for the Turkish crop. During off-years, Türkiye's production often decreases by as much as 60-70% compared to on-years. Production in 2022 (an on-year) was 200K mt. Iran's pistachio production has been declining over the past decade due to the industry's struggle with climate change and more recently, with dried-up irrigation water resulting from illegal irrigation wells. 2023 is an on-year for pistachios in Iran, and production could be higher than the 115K mt produced in 2022, but it is too early to form a clear picture. Conditions in the main production areas have been normal to favorable. Europe remains the largest export destination for pistachios but demand has not recovered to the levels seen in 2019-2021. As demand remains flat, prices will continue to be influenced by the global production outlook.