Turkey's pistachio crop is set to plunge 69% this year, hit by frost, drought and a natural off-year in the production cycle, according to a US government report.

Production in the 2025/26 season is forecast at just 120,000 tonnes, down from last year's record 385,000 tonnes, tightening domestic supplies in a country that consumes most of its own crop.

The sharp decline comes as pistachio trees follow their natural pattern of alternating between high-yielding "on years" and lower-producing "off years."

But this year's harvest has fallen below typical off-year levels after frost in February through April damaged trees in the key growing provinces of Gaziantep and Sanliurfa in southeastern Turkey. Below-normal rainfall during winter and spring further stressed orchards that rely mainly on rain rather than irrigation.

"The trees are 'tired' from last year's record high crop," said the report from the US Department of Agriculture's Foreign Agricultural Service in Ankara.

Unsurprisingly, the slump in output is expected to drive up prices of the popular tree nut.

Turkish retail prices have already surged 33% year-on-year in lira terms as of August, reaching 796 lira ($19.09) per kilogram, up from $17.56 a year earlier.

One silver lining for Turkish consumers is that carry-over stocks from the bumper 2024/25 harvest are expected to cushion any price increase. Inventories are forecast at 165,000 tonnes by the end of the current marketing year, down from 200,000 tonnes last year but up from 95,000 tonnes in 2023/24.

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However, market transparency is lacking as neither the government nor producer associations maintain official ending-stock numbers, leading to speculation and price volatility. Although municipal governments in Gaziantep and Sanliurfa have built licensed warehouses with 10,000-tonne capacity each to improve visibility, this amounts to a fraction of the total harvest.

To help tame price increases, Turkey's Agriculture Ministry in mid-September began allowing pistachio imports from the US, Iran and Syria without requiring a Pest Risk Analysis. Turkey also eliminated a 10% retaliatory tariff on US tree nuts on Sept. 22, though a 43.2% standard import duty remains.

The policy shift reflects growing pressure from retailers and consumers for the government to help stabilize the market; US retail prices for in-shell pistachios of around $13-14 per kilogram compare favorably with Turkish domestic prices now starting at $19-20 per kilogram.

With more favorable market access, imports are expected to increase more than 5% to 55,000 tonnes this year, though the high standard tariff rate is likely to curb growth beyond that, the report noted.

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Re-exports expected higher

Despite Turkey's reduced crop, Turkish pistachio exports are still forecast at a record 45,000 tonnes, driven by a re-export business that operates largely independently of domestic production.

Turkey imports pistachios from the US and Iran, processes and packages them in free trade zones where no duties apply, then re-exports them to markets including Italy, Iraq, Germany and Saudi Arabia.

Italy's Ferraro Hazelnut Company, owner of the Nutella brand, is the single largest buyer of Turkish-processed pistachios, purchasing about one-third of the country's annual export volumes.

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Looking ahead, this year's poor domestic output may go down as an anomaly as new plantings area continues to expand.

The number of bearing trees increased nearly 3% to 62.4 million at the beginning of the current marketing year, while non-bearing trees jumped 42% to 37.8 million, reported the US attache.

Many of these newer trees are approaching 10 years of age, when yields reach their optimal range. Growers have also invested in modern growing techniques and are increasingly planting the Siirt variety, which is less affected by the on-year/off-year production cycle than the dominant Antep variety.

"Turkey's production of high-quality pistachios is predicted to increase in the future with the increasing number of young bearing trees," the report stated.