SA’s pistachio industry ready for round two in the international market

by Kyla Van Heerden
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An investment by financial services provider, Fedgroup, is giving South Africa’s pistachio industry a boost to service the local market until demand in the market is met. Based in Prieska in the Northern Cape, Uitdraai Boerdery and Karoo Pistachios capitalises on the harsh semi-desert environment’s sizzling summers, cold winters and low rainfall to produce what is colloquially known as the desert emerald.

The pistachio varieties grown in South Africa, Shufra and Aryeh, were first discovered in a test orchard and brought to the country in the late 1990s. These varieties provide exceptionally large and attractive nuts for the global market and have a great taste with a sweet undertone.

A detailed study conducted by the Industrial Development Corporation (IDC) resulted in the identification of a potential pistachio industry in the area. The investment by the IDC was expected to take on the top performing countries in the pistachio nut industry, namely the United States and Iran, with an expected annually export of 2 500 – 3 000 tons.

In 2011, the IDC pulled its investment into Green Valley Nuts, and it seemed that the hope to build South Africa’s pistachio industry was too tough a nut to crack. Despite this, Uitdraai Boerdery, under management of Orffer and David Muller, continued with their pistachio operation and with the objective to rebuild the industry became a founding member of the Pistachio Growers Association, The Pistachio Nut Company, and Karoo Pistachios.

Pistachios are the fourth largest nut traded in the world by volume and by revenue every other year. Global production has been battling to keep up with the worldwide demand, making South Africa’s play into the market a substantial coup for the country’s agricultural exports.

The world’s four biggest pistachio producers are Iran, Syria, the United States and Turkey. They supply 98% of the world’s pistachio nuts. “While many of these markets are established, they are limited by their expansion opportunities, and some are even shrinking in production,” says Warren Winchester, General Manager of Ventures at Fedgroup.

Fedgroup is funding Uitdraai Boerdery’s operations using the Fedgroup Impact Farming venture – where both retail and institutional investors are able to invest in a pistachio tree on a sustainable farm for a minimum investment amount of R2 500. This provides a projected annual return of 15% per annum over a 15-year period.

“The Fedgroup funding model is of great value to us – not just the cash injection but the specialist expertise they bring in the working relationship we have created,’ says David Muller, Executive Director, Uitdraai Boerdery.  “It isn’t like trying to secure a loan from a bank; it’s about building a sustainable partnership to support future growth”.

Muller adds that there is a synchronicity between Fedgroup and Uitdraai Boerdery beyond the financial transaction, extending to their dedication to creating a positive and measurable impact in South Africa. Both companies believe in positively impacting people, the planet, and profit in equal measure.

Pistachios thrive in marginal and remote areas thus creating jobs and opportunities within local communities. Due to the water-wise nature of these farming operations, farming pistachio nuts doesn’t place additional strain on the current water shortage in South Africa.

“The first pistachio harvest took place in March this year with a large portion of the harvest initially servicing the South African market,’ says Winchester.

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