Pistachio Price Shock Spurs South Africa Farmers to Boost Output

South African farming group Karoo Pistachios is ramping up output to capitalize on surging prices and compete with the world’s biggest producers.

The nuts — used in ice cream and chocolate — climbed to the highest level in almost a decade this month as the conflict in Iran, the world’s second-largest grower, disrupts supplies in an already constrained market.

Growers are betting that climate conditions in the semi-arid Karoo region can turn the region’s newest crop into a viable export industry. The push highlights how geopolitical shocks are reshaping agricultural supply chains, creating incentives for new entrants even in regions historically overlooked for high-value crops.

Demand for the nuts has surged in recent years after the introduction of Dubai chocolate —a bar stuffed with pistachio cream — sparked a social-media frenzy.

The situation in Iran “helps us: prices are up a lot and many importers are calling about supply chain diversification,” Karoo Pistachios Chief Executive Officer David Muller said in an interview. “We’re looking at holding back product and selling at a slightly higher price later in the year.”

Muller’s company, based in the remote town of Prieska in South Africa’s Northern Cape province, is targeting output of as much as 60,000 tons by the end of the next decade, from a paltry 20 tons last year, he said. That would rank South Africa as the fourth-biggest exporter in the world, based on the latest data [2] from the US Department of Agriculture.

The Karoo is currently the only region in Africa where pistachios have been proven to grow at scale, according to Muller. Trials in Egypt, Morocco and Tunisia have yet to achieve commercial production, leaving South Africa with a potential first-mover advantage.

The Northern Cape province and its adjacent Karoo area has a mixture of dry, sunny conditions and low humidity in which nuts thrive. The country already ranks as the world’s biggest grower of macadamia and the third-largest producer of pecan nuts.

“Pistachio, by its nature, is built for the extremes of the Karoo,” he said. “The Karoo has climate conditions very similar to the Middle East. So we are really now at the cusp of growth and expansion.”

Backers say the crop may anchor a broader agricultural cluster in the Northern Cape, where crops including citrus fruit and wheat already thrive.

Karoo Pistachios plans to expand plantings to thousands of hectares and estimates that 1,000 hectares planted would sustain at least 800 direct and indirect jobs across farming, processing and logistics. Getting to that point would require almost a billion rand ($60 million) of capital.

Pistachio orchards can produce for more than 50 years and offer relatively high margins once mature. Still, returns depend on consistent yields and export quality over decades. Currency swings can erode competitiveness, while climate variability puts even hardy crops at risk.

“The real risk isn’t can we produce cheaply now,” said Casey Sprake, an economist at AG Capital. “It’s whether South Africa can really lock in reliable yields and export great quality throughout the cycle.”

To mitigate those risks, developers are focusing on improving project bankability, including spreading capital requirements across investors and building integrated value chains that include processing and export. Muller is also building an “outgrower” model aimed at bringing smaller and emerging farmers into commercial production.

“We really have the opportunity here to give people that previously didn’t have the opportunity to enter into anything like this,” Muller said.

IC UAC according to bloomberg [3]