Foreign Exchange Commitment Strains Pistachio Exporters in Iran

pistachio exporters in Iran

According to Keinia, pistachio exporters in Iran have been grappling with the impact of foreign exchange commitment policies for a few years now, as they object to the constraints placed on pistachio exports. These objections have yet to yield any results, and the current export situation for pistachio producers remains uncertain.

For some time, they have been seeking the removal of foreign exchange commitment obligations in the export process, but the government has not accepted this approach.

Seyyed Mahmoud Abtahi, the head of the board of trustees of the Pistachio Association, stated that due to the foreign exchange commitment policies, exporters cannot continue their operations. He mentioned that the export situation for the current year is unclear, as it depends on the exchange rate and will be determined based on the currency exchange rate. Abtahi criticized the foreign exchange commitment policies, saying that our situation was not good last year. Given our conditions and the fact that the United States produces three times as much as we do, that country has captured the entire market.

Major Traders Withdraw

According to pistachio exporters, since the implementation of the foreign exchange commitment removal law in 2018, large traders have been gradually pulling out of the pistachio trade. Small-scale pistachio exporters no longer operate in this field, and even high-quality pistachio exporters have no motivation to continue their work.

For instance, Farrokh Farahbakhsh, one of the exemplary exporters from the province, has not engaged in pistachio exports for the past two years. He said, ‘I no longer do this business because we buy pistachios from farmers with free dollars, but we have to sell them to the government at half the price, which results in a loss of 200,000 Iranian Rials per kilogram.’

Foreign Exchange Commitment Policies Reduce Kerman’s Pistachio Exports by 30%

According to Mehdi Tabibzadeh, the head of the Kerman Chamber of Commerce, foreign exchange commitment restrictions have caused problems for pistachio exporters. He stated that by suspending the commercial cards of exporters who have fulfilled less than 60% of their foreign exchange commitments, about 50% of pistachio export cards will be suspended.

Tabibzadeh added that this year, Kerman has a bumper pistachio crop of 100,000 tons. However, pistachio exports from the province have decreased by 30% in the past two weeks due to the limiting factors of foreign exchange commitment obligations.

He also mentioned that the prospects for business improvement until the end of the year are not promising. If existing obstacles, such as financial support, taxes, insurance, and banking sanctions, are not removed, economic indicators will improve, and economic growth will be realized.

Regarding the reported 7.9% economic growth in the spring, Tabibzadeh noted that the basis for calculating these figures is unclear. Such growth either needs to stem from increased productivity, which is not the case, or it requires significant investment, which is beyond Iran’s economic capacity. Therefore, without substantial investment, such growth may not be felt.

208 Traders Have Their Export Cards Suspended

Reportedly, only in the Kerman province, 208 pistachio exporters have had their export cards suspended due to returning less than 60% of their foreign exchange. This is while the total number of pistachio exporters in Kerman province is 396.

Earlier, Mohammad Reza Pourabrahimi, the head of the Economic Commission of the Parliament, had stated that suspended cards would be reactivated for six months upon receiving the necessary guarantees. However, according to Alavi, a member of the Non-Oil Exports Development Commission of the Iran Chamber of Commerce, this promise from the Central Bank is not documented anywhere, and its implementation remains ambiguous.

Iran’s Pistachio Production Growth

According to Daryoush Salempour, the Director-General of Tropical and Dried Fruits Affairs at the Ministry of Agriculture, the estimated pistachio production in the current year is 390,000 tons. He added that a significant portion of the pistachios produced are gradually entering domestic and export markets after processing and storage in standard warehouses.

Salempour explained that due to favorable climatic conditions and the Ministry of Agriculture’s efforts, pistachio-producing regions have seen the least damage. Therefore, pistachio production has shown remarkable growth compared to the past two years when it was less than 220,000 tons. He also emphasized that pistachio orchards are at the forefront due to their high added value, employing advanced technologies.

Salempour discussed the impact of water limitations on pistachio production and noted that due to recent droughts, there is a possibility of changes in cultivation patterns and migration of orchards to more suitable areas. Initiatives to combat water scarcity, including the transfer of water from the Sea of Oman and the use of modern irrigation systems, are being pursued.

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