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Pistachio sales increase when tariffs removed

BOWIE — Convincing four international markets to either eliminate or decrease tariffs significantly contributed to an increase in pistachio sales.

That’s according to a new report released by the American Pistachio Growers Association.

The report found that American pistachio shipments were more than 2.3 billion pounds greater than if tariff levels had remained in place. The result was $3 billion more in sales than what would have been collected under the higher tariff levels.

The study looked at the years 2009 to 2017 and examined the pistachio purchasing markets of China and Hong Kong, Mexico, Israel and the European Union.

Shipments increased on varying levels, depending on the market. In Israel, American pistachio shipments increased by an average of 317,250 pounds for every 1- percent decrease in tariffs, while the shipments to the European Union increased by more than 43.8 million pounds per 1-percent decrease in tariffs.

The dollar value of those shipments increased accordingly, the report states, with shipments to Israel gaining $1 million per 1-percent decrease in tariffs to shipments to the European Union worth $126.2 million per 1-percent decrease in tariffs.

The dollar value of shipments to China fluctuated wildly — from a low of -$0.53 per pound to a high of $0.56 per pound per 1-percent reduction in tariffs — so the report cautions use of China’s data.

The report notes, however, that tariffs alone are not the only factor in increased pistachio sales on the international market — pistachios are extremely price sensitive — and that a $1,000 increase in the price of American pistachios resulted in an average decrease of 261.8 metric tons shipped. That’s a loss of 577.3 pounds for every $1 increase.

In 2008, American Pistachio Growers were able to negotiate export into Israel, which, up until that time, had been importing pistachios exclusively from Iran, despite having a trade embargo against Iran in place. As of that 2008 deal, American pistachios are imported by Israel with no tariff, while all other nations are tariffed at 23 percent.

Under NAFTA — the North American Free Trade Agreement between the United States, Canada and Mexico entered into in 1994 — American pistachios are exported into Mexico duty-free, while other exporting nations are at 20 percent.

After China joined the World Trade Organization in 2011, China agreed to reduce tariffs on American pistachios initially from 40 percent to 10 percent, before landing at a 5-percent tariff. Meanwhile, Hong Kong charges no import duty on American pistachios.

Iranian pistachios are not tariffed under the Generalized System of Preferences in the European Union; however, American Pistachio Growers were able to negotiate a reduction in tariff levied on American pistachios to 1.6 percent in 1995, where it has remained since.

The result of eliminating or reducing tariffs is an average of 192 million pounds of pistachios per year going to market rather than storage.

“Shipments and prices per ton rose after the tariffs have been reduced/eliminated, and computed elasticities of demand show that there are many individual price shipment points where prices and shipments rose together,” the report concludes.

“Possible reasons for this are that APG’s marketing education efforts have caused consumers to view U.S. pistachios as being a good value proposition for superior quality, safety, and being healthy and nutritious. Other factors could be that consumers view pistachios as more of a necessity for good nutrition than a luxury, consider the prices comparable to competing items which makes U.S. pistachios more desirable, and the realization that purchases of U.S. pistachios are not a major expense in relation to total household purchases.”

The report, presented in June, was compiled by the Tootelian Company, of Sacramento, Calif.

Bowie schools helping those in need

BOWIE — Working together, volunteers, students and teachers have set up a community closet for those in need.

The closet is for individuals living within the Bowie area. According to Bowie Superintendent Wendy Conger, the closet is still in the beginning stages. The closet is located at Bowie High school.

“There is a need to support our families with clothing and other personal items, such as shampoo or soap. They are working here at Bowie High on a Saturday to get this going,” Conger said.

The school is also working with the Salvation Army in Willcox to create a student backpack food program.

“This will help our students be able to have nutritious foods. They will take the backpacks home on Thursday and return on Mondays. They will be filled with good food for the children to eat,” Conger said.