Iran faces U.S. challenge in "pistachio war"

Thu Oct 9, 2008 3:55am EDT
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By Fredrik Dahl

KERMAN PROVINCE, Iran (Reuters) - For some Iranians, it's a galling thought: the United States may oust Iran as the world's largest producer of pistachio nuts this year because of one of the worst harvests ever in the Islamic Republic.

The popular nibble is Iran's main export commodity outside the oil sector, earning it more than $1 billion last year, and providing many people with jobs in the arid, southeastern province of Kerman, which has 140,000 pistachio farmers.

Unusually cold weather during the flowering in April dealt a blow to the 2008 crop, which farmers say is down by as much as 75 percent from last season's record of 280,000 tons (617.3 million pounds).

The shortfall has helped push up pistachio prices but not by enough to compensate for lower volumes, they say.

The poor harvest follows a severe drought that is forcing Iran to import millions of tons of wheat and causing power shortages in the world's fourth-largest crude producer.

"We actually never had production as low as this," said Behrooz Agah, whose grandfather pioneered exports of the split-shelled nuts in the 1930s.

"For Iranian pistachio farmers, yes, it is a crisis," he said, standing in sweltering heat amid rows of trees with bunches of the red-green nuts growing in desert-like terrain.

Agah said he expected export revenue to fall to $350-400 million and that this year's frost would also hit the 2009 crop.   Continued...

<p>A worker sorts pistachios by hand during a final inspection before packing at a processing factory in Rafsanjan, southeast of Tehran, September 23, 2008. REUTERS/Caren Firouz</p>