Pistachios the new casualty of Iran's battered economy

An Iranian man looks at nuts for sale at a nut shop, in western Tehran. Pistachios are Iran's top non-oil export and provide work for hundreds of thousands of people.

TEHRAN // This should be the time of year that nut shop owner Mohammad Ahmadi counts his profits, after the recent new year holiday when Iranians consume huge amounts of their favourite snack, pistachios. Instead, he and others in the trade are staring at piles of unsold nuts.

The pistachio is to Iranian identity what apple pie is to America or feta cheese to Greece, but a boycott driven by social media has taken off as the price of the nut has doubled in recent months.

The number of customers has dropped terribly," said Mr Ahmadi, looking out at busy streets where few customers turned into his shop in the Salsabil neighbourhood of downtown Tehran.

The pistachio has become another casualty of Iran's sanctions-battered economy. The boycott reflects the public dismay over inflation now at 30 per cent, ahead of the June presidential election to pick a successor for Mahmoud Ahmadinejad.

Yet, the government, which usually tries to contain Iranians' anger over the economy, has backed the pistachio boycott - again for reasons tied to the western-led sanctions over Iran's nuclear programme. Pistachio exports provide a small but important pipeline for foreign revenues at a time when sanctions are squeezing Iran's oil and gas sales. Authorities say fewer nuts consumed at home means more available to sell abroad.

The pale green nuts are Iran's top non-oil export. Iran earned at least US$750 million (Dh2.75 billion) last year from exporting the nut, with some estimates as high as US$1bn. That is a fraction of the around $128m a day it earns from oil exports. But oil revenues were down about 45 per cent last year because of sanctions on the industry, making pistachios a reliable earner.

"Nowadays, any revenue from exports is like a drop of lifeblood for Iran," said Saeed Leilaz, an economic and political affairs analyst.

Iran is the world's No 2 producer of pistachios after the United States, and together the two rivals dominate the world market. The US reimposed a ban on Iranian pistachio imports in 2010, but it had little effect on Iran's sales since its main customers are in Asia, Europe and the Arab world. In 2012, Iran exported 110-140 million tons of pistachios, the majority of its production, and the industry employs hundreds of thousands of people.

But at home, Iranians are fuming over the cost of their national snack.

Pistachio prices have soared from about $8 a kilogram last year to more than $17. In some areas, a kilo has reached about $25, according to media reports.

The exact cause for the rapid rise in prices remains unclear. Iranian pistachio growers do not need to import major parts or machinery, whose costs have skyrocketed with the sinking value of the Iranian rial. The rial is currently trading at more than 35,000 to $1 compared with about 10,000 just two years ago. Prices of all Iranian products have been dragged higher by galloping inflation.

Last month, the head of the pistachio association, Mohsen Jalalpour, said prices at home have been affected by the rising price pistachios get on the international market - compounded by the rial's fall.

The campaign to boycott the nut was launched on Facebook head of last month's Nowruz, or new year. Demand for pistachios hits an annual high with the new year celebrations, when the nuts are served on nearly every table. Still, they are a treat, not a staple.

Last year, another internet-driven campaign tried to fuel a boycott on chicken after a similar price spike. That appeal fell flat because chicken is central to the Iranian diet.

The boycott of pistachios, in contrast, has gained a wide following.

"This is the first time that such a campaign has been answered widely," said Hamed Shabanali, a specialist in information technology. "Word has spread among ordinary people."

Another information technology specialist, Mahmoud Tehrani, said the boycott showed "how Facebook and virtual world are effective in the Iranian society, now."

Leila Alipour, a housewife, said she learnt about the boycott from her son's teacher.

"I will not buy any nut this year," she said in a Tehran bazaar. "It is too expensive.'

Initially, the government in February responded to anger over the rising prices by banning exports of pistachios to increase stocks at home and reduce prices. But it quickly reversed course, lifting the ban within a week and subsequently backing the boycott when it was launched.

State TV, which reflects the views of the ruling clerics, even paid notice of the boycott in an economics show earlier this month. It reported a survey of 1 million people with 87 per cent supporting the pistachio boycott.

Mr Ahmadinejad, in a February television interview, called the boycott a "good job".