Required Report - public distribution

**Date:** 8/17/2005

**GAIN Report Number:** SY5005

**Syria**

**Tree Nuts**

**Annual Report**

**2005**

**Approved by:**

![](media/image1.wmf)Asif J. Chaudhry

U.S. Embassy Cairo

**Prepared by:**

Fred Giles and Jaber Dalati

**Report Highlights:**

In early April 2004, pistachio trees suffered from a severe frost that
badly affected pistachio trees. The crop was reduced to one third the
normal crop. The 2004 frost effect on the 2005 crop is not yet evident.
Syrian pistachio production is forecast to increase gradually as
pistachio trees mature.

Includes PSD Changes: Yes

Includes Trade Matrix: Yes

Annual Report

Damascus \[SY1\]

\[SY\]

Table of Contents

[Executive Summary 3](#executive-summary)

[Production 4](#production)

[Consumption 4](#consumption)

[Trade 5](#trade)

[Stocks 6](#stocks)

[Policy 6](#policy)

[Marketing 6](#marketing)

# Executive Summary

Pistachio production is increasing in Syria due to the maturing of
planted trees that are still fairly young. The crop suffered from a
severe frost in 2004. Prices for pistachios are higher than previous
years due to the frost that reduced the crop by over 50 percent.
Pistachio prices increased by about 30 percent leading to an increase of
40 percent in the price of Arabic sweets. Local consumption and exports
of Arabic sweets were negatively affected by the price increases. Syria
exports green pistachios during the production season and imports
shelled pistachios.

# Production

+--------------------+----+------+----+------+---+------+-------------+
| **Commodity:**     | *  |      |    |      |   |      |             |
|                    | *P |      |    |      |   |      |             |
|                    | is |      |    |      |   |      |             |
|                    | ta |      |    |      |   |      |             |
|                    | ch |      |    |      |   |      |             |
|                    | io |      |    |      |   |      |             |
|                    | s, |      |    |      |   |      |             |
|                    | I  |      |    |      |   |      |             |
|                    | ns |      |    |      |   |      |             |
|                    | he |      |    |      |   |      |             |
|                    | ll |      |    |      |   |      |             |
|                    | B  |      |    |      |   |      |             |
|                    | as |      |    |      |   |      |             |
|                    | is |      |    |      |   |      |             |
|                    | ** |      |    |      |   |      |             |
+--------------------+----+------+----+------+---+------+-------------+
|                    |    | **20 |    | **20 |   | **20 | UOM         |
|                    |    | 04** |    | 05** |   | 06** |             |
+--------------------+----+------+----+------+---+------+-------------+
|                    | O  | New  | O  | New  | O | New  |             |
|                    | ld |      | ld |      | l |      |             |
|                    |    |      |    |      | d |      |             |
+--------------------+----+------+----+------+---+------+-------------+
| ########           |    | **0  |    | **0  |   | **0  | (           |
|  Market Year Begin |    | 8/20 |    | 8/20 |   | 8/20 | MONTH/YEAR) |
|                    |    | 04** |    | 05** |   | 06** |             |
+--------------------+----+------+----+------+---+------+-------------+
| Area Planted       | 6  | 6    | 6  | 6    | 0 | 5    | (HA)        |
|                    | 10 | 0000 | 00 | 0000 |   | 9000 |             |
|                    | 00 |      | 00 |      |   |      |             |
+--------------------+----+------+----+------+---+------+-------------+
| Area Harvested     | 5  | 5    | 5  | 5    | 0 | 5    | (HA)        |
|                    | 10 | 1000 | 20 | 2000 |   | 3000 |             |
|                    | 00 |      | 00 |      |   |      |             |
+--------------------+----+------+----+------+---+------+-------------+
| Bearing Trees      | 65 | 6500 | 70 | 7000 | 0 | 7500 | 1000 TREES  |
|                    | 00 |      | 00 |      |   |      |             |
+--------------------+----+------+----+------+---+------+-------------+
| Non-Bearing Trees  | 35 | 3500 | 30 | 3000 | 0 | 2500 | 1000 TREES  |
|                    | 00 |      | 00 |      |   |      |             |
+--------------------+----+------+----+------+---+------+-------------+
| Total Trees        | 1  | 1    | 1  | 1    | 0 | 1    | (1000       |
|                    | 00 | 0000 | 00 | 0000 |   | 0000 | TREES)      |
|                    | 00 |      | 00 |      |   |      |             |
+--------------------+----+------+----+------+---+------+-------------+
| Beginning Stocks   | 86 | 8684 | 61 | 2184 | 0 | 9184 | (MT)        |
|                    | 84 |      | 84 |      |   |      |             |
+--------------------+----+------+----+------+---+------+-------------+
| Production         | 5  | 2    | 6  | 6    | 0 | 6    | (MT)        |
|                    | 20 | 1000 | 00 | 0000 |   | 5000 |             |
|                    | 00 |      | 00 |      |   |      |             |
+--------------------+----+------+----+------+---+------+-------------+
| Imports            | 40 | 1    | 50 | 5000 | 0 | 5000 | (MT)        |
|                    | 00 | 5000 | 00 |      |   |      |             |
+--------------------+----+------+----+------+---+------+-------------+
| **TOTAL SUPPLY**   | 6  | 4    | 7  | 6    | 0 | 7    | (MT)        |
|                    | 46 | 4684 | 11 | 7184 |   | 9184 |             |
|                    | 84 |      | 84 |      |   |      |             |
+--------------------+----+------+----+------+---+------+-------------+
| Exports            | 1  | 5000 | 1  | 1    | 0 | 2    | (MT)        |
|                    | 40 |      | 50 | 5000 |   | 0000 |             |
|                    | 00 |      | 00 |      |   |      |             |
+--------------------+----+------+----+------+---+------+-------------+
| Domestic           | 4  | 3    | 4  | 4    | 0 | 4    | (MT)        |
| Consumption        | 45 | 7500 | 30 | 3000 |   | 5000 |             |
|                    | 00 |      | 00 |      |   |      |             |
+--------------------+----+------+----+------+---+------+-------------+
| Ending Stocks      | 61 | 2184 | 1  | 9184 | 0 | 1    | (MT)        |
|                    | 84 |      | 31 |      |   | 4184 |             |
|                    |    |      | 84 |      |   |      |             |
+--------------------+----+------+----+------+---+------+-------------+
| **TOTAL            | 6  | 4    | 7  | 6    | 0 | 7    | (MT)        |
| DISTRIBUTION**     | 46 | 4684 | 11 | 7184 |   | 9184 |             |
|                    | 84 |      | 84 |      |   |      |             |
+--------------------+----+------+----+------+---+------+-------------+

Pistachios are grown in Syria under rainfed conditions. There is a total
of 10 million trees planted on 60,000 hectares. Due to the frost in
April 2004, the 2004 crop of inshell pistachios is estimated at 21,000
tons. The effect of the frost is not yet evident on the 2005 crop. In
2005, the number of fruit-bearing trees is estimated at about 7 million,
and the crop is forecast at 60,000 tons. No major incidence of pests or
diseases was reported in 2005. Pesticides are rarely used in pistachio
orchards; the use of commercial fertilizer is not common, and growth
regulators are not used. Organic matter is generally used at planting
time.

Pistachios are grown in areas that are usually not suitable for most
other crops and are, in many places, co-planted with figs, olives, and
grape vines. The majority of the trees in Syria are still fairly young
and have not reached the economic fruit-bearing stage. The average yield
per tree increases with the age of the tree. The Ministry of Agriculture
and Agrarian Reform encourages pistachio production by selling seedlings
at nominal prices. Olive tree planting competes with pistachios in newly
reclaimed areas. Farmers are even replacing very young pistachio trees
with olive trees, which are more profitable to grow. Accordingly,
planted areas may slightly drop. During the production season in 2004,
farm-gate prices were about 125 - 150 SP (USD 2.50 -3.00) per kilogram
of green pistachios, about 30 percent above the prevailing price one
year ago.

# Consumption

A significant part of the pistachio crop is consumed green in Syria. The
harvesting season begins in August. Wholesale prices of shelled
pistachios that are mainly used for the production of sweets and local
ice cream have increased by about 20 - 30 percent due to the frost.
Prices range from approximately 600 SP (USD 12) to 650 SP (USD 13) per
kilogram for shelled pistachios of the first grade varieties. Illegally
imported Iranian pistachios sell for 600 SP (USD 12.0) per kilogram. No
U.S. pistachios are present in the Syrian market. As a result of the
pistachio price increases, prices of Arabic sweets that use pistachios
as a major ingredient have increased by about 40 percent.

# Trade

+----------------------------+----------+--------------+--------------+
| #                          |          |              |              |
| ###### Export Trade Matrix |          |              |              |
+----------------------------+----------+--------------+--------------+
| **Country:**               | *        | Units:       | Metric Tons  |
|                            | *Syria** |              |              |
+----------------------------+----------+--------------+--------------+
| **Commodity:**             | **Pis    |              |              |
|                            | tachios, |              |              |
|                            | Inshell  |              |              |
|                            | Basis**  |              |              |
+----------------------------+----------+--------------+--------------+
| **Time period:**           | **CY**   |              |              |
+----------------------------+----------+--------------+--------------+
| **Exports for**            | **2004** |              | **2005**     |
+----------------------------+----------+--------------+--------------+
| U.S.                       | 0        | U.S.         | 0            |
+----------------------------+----------+--------------+--------------+
| Others                     |          | Others       |              |
+----------------------------+----------+--------------+--------------+
| Lebanon                    | 2000     | Lebanon      | 5000         |
+----------------------------+----------+--------------+--------------+
| Jordan                     | 2000     | Jordan       | 3000         |
+----------------------------+----------+--------------+--------------+
| **Total for Others**       | 4000     |              | 8000         |
+----------------------------+----------+--------------+--------------+
| **Others not listed**      | 1000     |              | 7000         |
+----------------------------+----------+--------------+--------------+
| **Grand Total**            | 5000     |              | 15000        |
+----------------------------+----------+--------------+--------------+

+-----------------------------+-----------+------------+--------------+
| ##                          |           |            |              |
| ####### Import Trade Matrix |           |            |              |
+-----------------------------+-----------+------------+--------------+
| **Country:**                | **Syria** | Units:     | Metric Tons  |
+-----------------------------+-----------+------------+--------------+
| **Commodity:**              | **Pi      |            |              |
|                             | stachios, |            |              |
|                             | Inshell   |            |              |
|                             | Basis**   |            |              |
+-----------------------------+-----------+------------+--------------+
| **Time period:**            | **CY**    |            |              |
+-----------------------------+-----------+------------+--------------+
| **Imports for**             | **2004**  |            | **2005**     |
+-----------------------------+-----------+------------+--------------+
| U.S.                        | 0         | U.S.       | 0            |
+-----------------------------+-----------+------------+--------------+
| Others                      |           | Others     |              |
+-----------------------------+-----------+------------+--------------+
| Iran                        | 10000     | Iran       | 4000         |
+-----------------------------+-----------+------------+--------------+
| Turkey                      | 3000      | Turkey     | 1000         |
+-----------------------------+-----------+------------+--------------+
| Afghanistan                 | 1000      |            |              |
+-----------------------------+-----------+------------+--------------+
| ##                          | 14000     |            | 5000         |
| #### Total Total for others |           |            |              |
+-----------------------------+-----------+------------+--------------+
| **Others not listed**       | 1000      |            |              |
+-----------------------------+-----------+------------+--------------+
| **Grand Total**             | 15000     |            | 5000         |
+-----------------------------+-----------+------------+--------------+

Foreign trade statistics indicate an increase in \"legal\" imports of
shelled pistachios from 2,004 MT in 2002 to 2,058 MT in 2003, of which
91 percent came from Iran. Trade data for 2004 are not yet published.
In-shell pistachios cannot be officially imported. Heavy inspection at
the Syrian-Lebanese borders during the last month has affected the
supply of Iranian pistachios. Pistachios, shelled and in-shell, are
being smuggled into Syria via Lebanon from Iran and Turkey. Afghani
pistachios are not currently available in the Syrian market. All roasted
non-local, in-shell pistachios sold in Syria are unofficially imported
through Lebanon and Turkey or brought by Iranian tourists. Syria does
not import any pistachios from the United States. An import license is
necessary for all imports of pistachios. Customs duties on shelled
pistachios are set at 15 percent plus a unified tax of 14 percent, while
customs duties in neighboring Lebanon are only 5 percent. The customs
tariff is expected to change in 2005 when the unified tax is expected to
be incorporated into the tariff.

Syrian official exports of green pistachios decreased from 3,565 MT in
2002, to 2,865 MT in 2003. Primary markets were Lebanon (2,326 MT) and
other Arab countries. Visiting tourists from Arab countries informally
export significant quantities of pistachios out of Syria during 3-4
months after the harvest season every year. Syrian exports of shelled
pistachios are negligible (52 MT in 2003). With high prices for local
production of shelled pistachios (about 650 SP or USD 13/kilogram),
Syria cannot compete in the international market with Iran, Turkey,
Afghanistan, and the United States.

# Stocks

According to trade sources, the local supply of pistachios, plus imports
(legal and illegal), usually match domestic consumption. Ending stocks
are usually expected to be sufficient for a few months. The current
ending stock level is low due to the frost in 2004 and an anticipated
recovery in 2005. Stocks are expected to rise in the future when local
production increases and if the price of imported pistachios remains
below the local crop price. At the end of the marketing season in July
2005, the prices for locally-produced shelled pistachios were higher
than those for Iranian and Turkish pistachios. All stocks are held
generally by the traders, not the producers.

# Policy

The government continues to encourage pistachio production by selling
seedlings at nominal prices. There is government intervention in some
areas of pistachio trade, such as banning the imports of in-shell
pistachios; but prices are determined by supply and demand conditions.

# 

# Marketing

There are no Syrian standards for pistachios. Sizing, shelling, and
grading are all done by hand. Private sector storage facilities are
adequate. The entire pistachio trade is in the hands of the private
sector.

Trade sources state that Iranian and Turkish pistachios are more
suitable than American pistachios for the local Arabic sweet industry.
American pistachios reportedly turn brownish in color during baking as a
result of the way they are preserved. The local market preference is for
a whole nut, greenish or yellowish in color, that retains its color
during high-temperature baking for Arabic sweets.

## 

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