Turkey’s pistachio production in marketing year (MY) 2024/25 is forecast to reach a new record due to multiple factors. Higher production volumes and larger-than-normal carryover stocks are expected to prompt sizeable export volumes of Turkish pistachios for the first time. While Turkey’s production of tree nuts continues to grow, the country is expected to import substantial volumes of almonds and walnuts in MY 2024/25 to meet steady consumer demand. Imports of U.S. tree nuts continue to be disadvantaged by a 10 percent retaliatory tariff that was imposed because of U.S. Section 232 duties on Turkish steel and aluminum. However, despite this additional tax and growing competition, the United States is still the one of the top suppliers of walnuts, almonds and pistachios to Turkey.
I. PISTACHIOS a. PRODUCTION
Turkey’s pistachio production in marketing year (MY) 2024/25 is forecast to more than double year- over-year to a record of 385,000 metric tons (MT). There are multiple factors contributing to this projected increase, the most notable of which is this year is considered an “on-year” in the production cycle for pistachios. The growth in production is also linked to an increase in the number of bearing trees, higher yields as trees reach optimal bearing age, and favorable weather conditions during the growing season.
According to the Turkish Statistical Institute (TurkStat), there were an estimated 60.5 million bearing pistachio trees at the beginning of the current marketing year, up nearly 4 percent from last year. Market sources confirmed that many of these trees are now approaching ten-years in age, which when yields start reaching their optimal range. This age-related yield factor will contribute to higher production volumes this year and in the years ahead.
At the same time, there are about 26.6 million non-bearing trees, which is about 4.5 percent higher than a year ago. Turkey’s production of high-quality pistachios is predicted to increase in the future with the increasing number of young trees.
Market sources indicate that TurkStat might be undercounting the actual number of bearing and non- bearing trees. However, even if the number of trees is being undercounted, TurkStat’s figures reconfirm the expansionary trend in the country’s production of pistachios.
Over the last 10-15 years, pistachio growers have invested in developing and expanding their orchards, replacing old trees (some of which are 50-years old) and introducing modern growing techniques. These more sophisticated orchards with their newer trees, which are less affected by the periodicity in production, are expected to achieve higher yields and production volumes in the future. For the new trees being planted, market sources confirmed that growers are planting more of the Siirt variety compared to earlier years, known to be less periodical than the Antep variety. However, the Antep variety still accounts for most of the pistachio trees being grown.
Good rainfall conditions in the spring of this year also contributed to the increase in pistachio production in MY 2024/25. Timely and adequate precipitation is critical since most pistachio production across Turkey is rain-fed.
As seen in the Map 1, rainfall this spring in the southeastern part of the country, where most of the pistachios are grown, was near normal. A sunny summer, with no major weather events, and no unexpected pest attacks also promoted higher yields this year.
Pistachio yields and production levels can vary dramatically from year-to-year with average yields during an on-year ranging from 4-6 kilograms (kg) per tree and 2-3 kg per tree during off-years. However, periodicity effects on yields have decreased in recent years with the planting of new trees, on- farm investments, and the introduction of good agricultural practices. At the same time, with the help of outside training provided by different institutions, farmers have learned how to reach higher yields by taking better care of the soil and trees. As a result of these improvements, average yields are expected to continue to slowly increase in the coming years.
One of the more notable and ongoing training programs, called “May you have abundant pistachios,” was launched back in 2011 by the Turkish Foundation for Combating Soil Erosion, Forestation, and Protection of Natural Habitats (TEMA), with contributions from private companies. The initiative trains farmers in Gaziantep and Sanliurfa – the two biggest pistachio-producing provinces in the country – to properly care for their trees through improved pruning and trimming techniques, and better practices for applying fertilizer and pesticides. Farmers applying this training report seeing their yields double or even triple at times, while also reducing periodicity effects in off-years. In parallel to this training program, local universities in the major pistachio growing regions have developed better production methods and plant protection measures to help farmers improve yields.
The two southeastern provinces of Gaziantep and Sanliurfa account for 80 percent of the country’s total production of pistachios. The southeastern provinces of Adiyaman, Siirt, Kilis, Kahramanmaras, Mardin, and Diyarbakir account for another 15 percent of total production. The remaining five percent is thinly spread across the Aegean, Mediterranean, and Marmara regions.
There are two main types of pistachios grown in Turkiye, the Gaziantep (Antep) and Siirt varieties. Both are unique to Turkey and differ in size and shape compared to the pistachios grown in Iran and the United States. The Antep variety accounts for 85 percent of pistachios grown in Turkey. The Siirt variety makes up the remaining 15 percent of production; the Siirt variety is considered a higher-yielding variety than the Antep variety.
The quality standards for Turkish pistachios are directly related to the size of the nut. 90 nuts or fewer per 100 grams is considered first quality; 90-100 nuts are second quality; 100-120 nuts are third quality; and more than 120 nuts are fourth quality.
CONSUMPTION
MY 2024/25 consumption is forecast higher year-on-year at 235,000 MT, based on a projected increase in domestic pistachio production and the expectation that traders will want to draw down their record- sized stock levels as much as possible.
Turkiye continues to grapple with high inflation, including rising food prices. In August, the annual consumer price index (CPI) inflation was nearly 52 percent and annual food inflation reached almost 45 percent. See Post’s latest Exporter Guide for more information about the current economic conditions in Turkiye.
In the case of pistachios, retail (and bulk) prices during the month of August were nearly 30 percent higher in terms of Turkish Lira (TL) than the same time last year. By comparison, though, the price in U.S. dollars (USD) was almost unchanged. See table 1.
The reason retail (and bulk) pistachio prices (30 percent) did not increase as much as general food inflation (45 percent) was primarily due to the downward pressure on pistachio prices resulting from the anticipated record in production and large carryover stocks in MY 2023/24 and 2024/25. While still high, these relatively lower retail prices for pistachios will encourage increased consumption, especially among the upper-and higher-income households who are less impacted by the difficult economic realities in the country.
Historically, most of the country’s pistachio crop is consumed domestically, though Turkiye is expected to export a share of its crop this year because of an anticipated oversupply. Consumption levels vary year-to-year depending on the availability of domestic supplies. About 35 percent of pistachios are consumed as snacks and the remaining 65 percent are used in making confectionary products, especially traditional desserts like baklava. In addition, during the last decade, more pistachios are being used in other desserts, such as chocolate and ice cream.
In the last few years, consumers in larger cities increasingly prefer to buy packaged pistachios and other nuts from retail supermarkets instead of buying them from a traditional bulk nut store. This trend is expected to continue as consumers demand greater convenience and as more supermarkets spread across the country. For more information about the latest retail sector trends, please refer to Post’s latest Retail Food Report.
Approximately half of the pistachios that are consumed for snacking are packaged. This percentage is expected to increase in the future as consumers demand greater convenience and shop at discount retail outlets where packaged food products are the norm. With this shift towards increased consumption of packaged pistachios, per capita consumption (2 kg/year) and overall consumption is expected to grow.
b. TRADE
Exports
MY 2024/25 exports are forecast at a record 80,000 MT, assuming steady demand for re-exported pistachios and the potential for Turkiye to export domestic pistachios. Given the anticipated oversupply of domestic pistachios this year, Post expects Turkiye will export a sizeable amount of domestic pistachios to overseas markets this year. Up until this year, Turkiye only exported minor amounts of domestic pistachios, mostly in processed products. The bulk of Turkiye’s exports have historically consisted of U.S. and Iranian pistachios, which are sorted and packed in Turkish free trade zones and re- exported to third markets. Looking ahead, given the yearly fluctuations in domestic pistachio production, Post expects that the re-export business will continue to dominate overall exports for the foreseeable future.
Turkiye predominantly exports shelled pistachios. The leading export destinations are Italy, Germany, Iraq, Syria, Malaysia and Saudi Arabia.
Imports
MY 2024/25 imports are forecast at 35,000 MT, which is down about 27 percent from the previous year’s newly revised figure as import demand is expected to slacken because of a record domestic harvest and large pistachio stocks.
MY 2023/24 pistachio import volumes are revised higher to 48,000 MT in line with the latest trade data. The United States and Iran were the largest sources of imported pistachios, with U.S. pistachios accounting for 80 percent of total imports. According to market sources and Post observations, imported pistachios are typically not sold on the domestic market because of the high import taxes but are instead brought into free trade zones for processing and re-export. The absence of a bilateral phytosanitary protocol also discourages imported pistachios from entering the market for domestic consumption.
The Most Favored Nation (MFN) duty on imported pistachios is 43.2 percent. However, since May 2019, imported pistachios from the United States have been subject to an additional 10 percent retaliatory tariff, bringing the total applied tariff rate to 53.2 percent. The retaliatory duty was imposed in response to U.S. Section 232 tariffs on Turkish steel and aluminum.
c. STOCKS
With the record harvest, year-end stocks for MY 2024/25 are forecast to more than double from last year’s newly revised estimate to 200,000 MT. This prediction assumes that traders will only sell off a portion of their inventories because stock levels are so large.
MY 2023/24 ending stocks are revised higher to 95,000 MT based on an upward revision to the pistachio production number and in alignment with market expectations.
Pistachio stocks vary considerably from year to year, in line with the cyclical nature of production. This cyclicality and the fact that neither the government of Turkiye (GoT) nor producer associations maintain ending-stock numbers leads to speculation, price fluctuations, and artificially inflated prices. According to industry insiders, pistachio traders intentionally hold onto inventories longer than normal to drive domestic prices higher. Accurate end-stocks data would help stabilize price fluctuations and consumption levels, especially in off-years.
Municipal governments in Gaziantep and Sanliurfa have taken steps to increase transparency of pistachio stock levels in hopes of reducing speculation in the market. In June 2021, the Gaziantep Commodity Exchange (GCE) built Turkiye’s first licensed pistachio warehouse with a capacity of 10,000 MT. The warehouse has an electronic trading platform as well as a laboratory for quality testing. Sanliurfa Commodity Exchange has also invested in a licensed pistachio warehouse project with 10,000 MT of storage capacity.2 As these licensed warehouses represent just a small fraction of overall production, more of these facilities are needed to increase market transparency on the status of domestic stock levels. The government operates licensed warehouses for other crops, such as wheat, sunflowerseed, and cotton to create price stability.
Scientists from various local universities continue supporting research applications to improve storage conditions, which is important in maintaining the quality of pistachios and in helping minimize food safety concerns, such as aflatoxin.
d. POLICY
Changes on the Horizon for Agricultural Support Payments
While the central government does not provide specific, direct support payments to pistachio or other tree nut growers, the government does offer generic subsidies that are available to all registered farmers. The amount of generic subsidies in 2024 were up year-over-year in Turkish Lira but were nearly unchanged in USD. Pistachio growers and other farmers continue to complain that the subsidy this year, like the past several years, is inadequate to cover the rising cost of inputs, such as electricity, labor, and water.
On August 29, 2024, the GoT announced in a Presidential Decision Decree (PDD) that it was instituting
a new support system that would come into effect for 2025-2027. The payment under the new system is based on a calculation in which a standard coefficient amount per decare (da) for all crops that is multiplied by a multiplier factor depending on the crop. For 2025, the coefficient has been set at 244 TL/da and the multiplier for tree nuts is fixed at the lowest level of just one. (Note: Other crops, which are considered more strategic like wheat, have a higher multiplier factor.) Thus, tree nut farmers will receive 244 TL/da (=244 TL/da x 1). The coefficient may be updated each year, depending on the overall market conditions and economic situation in the country.
Additionally, a subsidy payment will be paid for some products each year. The products and amount of the subsidy to be paid will be declared each year depending on needs of the country. Tree nuts are not expected to get a subsidy but only the basic support (as defined in this paragraph) starting 2025.
Grower Groups Advocate for Gov’t to Set Purchase Prices for Pistachios
Some agriculture-related non-governmental organizations (NGOs) in the Sanliurfa and Gaziantep provinces are demanding that the GoT, through the Turkish Grains Board (TMO), establish official purchase prices for pistachios like it does for hazelnuts. These groups argue that pistachios are just as strategic as hazelnuts to the wellbeing of the Turkish economy. These groups are also advocating for specific, direct government subsidy for pistachio producers.
While the national government has not actualized these demands, the Metropolitan municipality of Gaziantep – one of the two largest pistachio- producing provinces – appears to have taken some small steps towards establishing a set price when purchasing pistachios from local growers. In late August 2024, the municipality started purchasing pistachios for making baklava and storing these nuts in the licensed pist
achio warehouse that is operated by the Gaziantep Chamber of Commerce. At the same time, the Sahinbey district municipality in Gaziantep also started purchasing pistachios for making baklava.
The Mayor of Sahinbey announced that the municipal government had started purchasing pistachios to keep traders from manipulating the market and stabilize prices. Supermarket chains and nut retailers have lodged similar complaints in the past. Post concurs with these claims, though prices in MY 2024/25 should soften due to increased supplies.
Gaziantep metropolitan municipality’s purchase price is between 250 to 310 TL/kg (7.35 – 9.12 USD/kg), depending on product quality. The price for same product in Gaziantep Commodity Exchange is between 265 to 320 TL/kg. (7.79 – 9.41 USD/kg), as of early September.
Pistachio Imports for Consumption Considered One Potential Solution to Artificially High Prices
According to industry analysts, there are some traders and retail chains that are advocating for the GoT to remove/lower the import tariffs and other trade barriers that would enable price-competitive, imported pistachios to enter the local market and, thereby, help stabilize the domestic price for pistachios. From Post’s perspective, imports for consumption would definitely have a stabilizing effect considering that exports of in-shell U.S. pistachios from January-July of this year cost about 6.80 USD/kg whereas the retail price in Turkiye for domestic pistachios is currently around 17 USD/kg.
At the same time, market sources report that nut traders have petitioned the government to allow pistachios to be imported duty-free for processing and re-export under the Inward Processing Regime (IPR). The IPR allows companies to bring in certain goods tax free for processing inside the country and re-export. At present, pistachio imports can only enter duty free inside a tax-free zone. The IPR customs arrangement offers companies greater flexibility to process and re-export from anywhere in the country.
Training Growers and Processors to Comply with EU Standards
The Gaziantep Commodity Exchange (GCE), in cooperation with the German Institute of International Cooperation (GIZ), is conducting trainings for people who work or would like to work in the pistachio industry. These trainings include processing and roasting, marketing, foreign trade, and sustainability. Additionally, there are trainings, in cooperation with GIZ, for GCE member companies on topics covering the EU Green Transformation Agreement, EU Carbon Decreasing Mechanisms, EU Field to Fork Strategy, and EU Supply Chain Regulations. For farmers, there will be trainings about smart agriculture applications, reducing the use of pesticides and fertilizers, and pest management.
For the full article from USDA Foreign Ag Service, including details on the Turkish almond, hazelnut, and walnut markets, click HERE.