America's Taste for Pistachios Is Safe Despite Iran Embargo

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(Bloomberg) -- America’s love of the pistachio will be mostly spared from any fresh sanctions against Iran, a major world producer of the nut.

While the 2015 nuclear pact lifted sanctions on Iran, pistachios didn’t come flooding into the U.S., as growers feared. The U.S. has high tariffs on Iranian pistachios that more than triple their cost.

“While the big print said Iranian products may now enter the U.S. because the embargo was lifted, in the case of pistachios, the tariff is separate,” said Richard Matoian, executive director of American Pistachio Growers, a trade association in Fresno, California. “The small print keeps them out.”

Because of that, the U.S. only imports about 1 million pounds (454 metric tons) of pistachios from Iran each year, Matoian said. And those aren’t usually in the shell. They’re kernels -- small and green nuts that are harvested early, and which are used as a confection, on top of ice cream or the sides of cannoli, for example. Those aren’t subject to tariffs, but sanctions could block them from the U.S., Matoian said.

California produced more than 600 million pounds in 2017, which accounts for the vast majority of all U.S. output, and the world’s largest crop. Iran, according to some estimates, was around 350 million pounds that year, Matoian said.

The two countries go head-to-head on the world market, but there isn’t much impact unless allies join the U.S. in sanctions, forcing Iranian products into other markets, said Bob Klein, manager of the Administrative Committee for Pistachios.

It wasn’t always this way. Before the U.S. started growing the nut in 1976, a lot of pistachios in the U.S. were from Iran, Klein said. Then, with the onset of tariffs and embargoes during the Iran hostage crisis, the California industry began to boom.

“Global production of pistachios doesn’t meet global demand, so all the products can find a market,” Klein said. “It’s just going to shift around.”

©2018 Bloomberg L.P.

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