4.2. Pistachios

Pistachio prices are highly influenced by:

• The u201conu201d and u201coffu201d crops dynamics; a strong alternate bearing is genetically determined in pistachio, where high productions one year are followed by low crops the following one.
• The Californian and the Iranian crops, as the top world producers of pistachios. In recent years, the smaller harvests in Iran, mainly due to drought and frost damages, have been offset by the growth in production in California (Figure 10).
• The carryover of the Californian crop in u201conu201d years as an instrument to balance supply in u201coffu201d years and thus smooth out the price volatility curve, which without this market regulation policy could be extreme.
• The Wonderful Pistachios & Almonds u201copening priceu201d policy as a reference company.
• Normally, in u201coffu201d years, prices rebound and in u201conu201d years, prices correct downwards. Pistachio prices reached their all-time high in 2015, coinciding with the shortest crop in California in the last 15 years as a result of the drought that California suffered in those years and due to the lack of chilling hours that winter, and corrected downwards in 2016 with what was a record harvest at that time. At the end of 2018, prices experienced another important correction as a result of another record harvest in California (Figure 10).

Regarding the outlook for the following years, it is important to consider that the US pistachio industry is rapidly expanding based on an estimated annual growth rate in new bearing acres of 7-10%. This is expected to lead to less relevant volume swings between on and off years, as new plantations are expected to yield better. Moreover, over the last three years the crop in Tu00fcrkiye (Turkey) has significantly grown, as a result, Turkish pistachios are becoming an alternative in the world markets.