Iran Pastry, Chocolate Exports Hit $800m in Fiscal 2018-19

EghtesadOnline: A total of $800 million worth of pastry and chocolate were exported from Iran in the last fiscal year (March 2018-19).

News ID: ۷۴۸۴۴۷

16 September 2019

In an exclusive interview with the Persian daily Donya-e-Eqtesad, Secretary of Iranian Pastry and Chocolate Association Jamshid Maghazei said Iran exports to 66 countries.

Iraq and Afghanistan are major export destinations for Iranian pastry and chocolate.

Other destinations include the US, Japan, Russia, the Commonwealth of Independent States and European countries, especially those in Eastern Europe, Financial Tribune reported.

According to the official, Iran produces 1.7 million tons of pastry and chocolate annually, while the nameplate capacity stands at 2.4 million tons.

He added that per capita consumption of pastry and chocolate in Iran is 21 kilograms per annum.

According to Secretary of Trade Promotion Organization of Iran's Pastry, Chocolate and Cereal Products Desk Gholamreza Sabz-Ali, pastry and chocolate account for 30-40% of Iran’s total food exports.

Some 70% of the machinery used in Iran's chocolate and pasty industry are provided domestically.

Chocolate Production Hub

Tabriz is known as the chocolate capital of Iran, and arguably that of the entire Middle East.

Close to 50% of Iran’s biscuits and chocolates are produced in the northwestern Iranian city.

There are over 850 production units in Tabriz, exporting to more than 50 countries.

Iran’s biggest confectionery company, Shirin Asal, which is also one of the biggest in the Middle East, made foray into the Qatari market in recent years.

“We have already done a market study in Qatar and fortunately there is demand for Iranian products. People in Qatar are willing to buy products produced in Iran,” Hossein Mahfouzi, Middle East export executive of Shirin Asal, told Qatar’s daily newspaper The Peninsula in October 2017.

With a turnover of about $5 billion per annum, the company, which produces more than 1,000 products, including biscuits, cakes, pastries, jam, chocolates, wafers, cookies, crackers, chewing gums, hard candies, marshmallows, toffees and jelly products, as well as cocoa powder and butter, said it was planning to set up a factory in Qatar.

“Our future plan is to have a small factory for the Qatar market as soon as we get the right feedback [about which product has more demand] from the market,” he said.

Shirin Asal also supplies oilseeds and conserves, as well as raw, cooked and frozen foods; and animal husbandry and industrial products.

“We are not sure about the demand in each category of products. As soon as we distribute the products in the market, we will have a right indication of which product is moving better than others. And, in that time, we will plan to have a production facility for that specific commodity for production in Qatar,” Mahfouzi said.

“The products, which will be distributed, will be mainly cake-lines and confectionery items."

The products coming out of the company’s production unit is likely to be cheaper compared to other imported products.

“The products will be naturally cheaper, as it will be made in Qatar,” he said.

Shirin Asal Food Industrial Group, which is exporting its products to 75 countries, is the only fully integrated Iranian confectionery group.

Duty-Free Exports to EEU

Iran is also negotiating with the Eurasian Economic Union for the duty-free export of biscuits and chocolates to Eurasia Economic Union member states.

Based on an agreement between Iran and EEU, exports of Iranian biscuit and chocolate to the union’s member states will be exempt from customs duties.

A draft agreement between Iran and EEU was signed in Yerevan, Armenia, on July 5 after more than a year of negotiations for levying preferential export tariffs on 350 Iranian industrial products in return for 180 commodities from EEU.

Later on May 17, the five-nation Eurasian Economic Union signed a three-year provisional agreement with Iran in Kazakhstan's capital city of Astana to welcome the Islamic Republic into the bloc’s free-trade zone.

The deal is expected to substantially increase trade between Iran and EEU.

The arrangement lowers or abolishes customs duties, setting off a three-year process for a permanent trade agreement.

The Russian Ministry of Industry and Trade has said that a full-fledged agreement on a free trade zone between Iran and EEU will be concluded by early 2022.

According to the ministry, the interim agreement signed in May covers 50% of the trade between the two sides.

The Eurasian Economic Union is an international integration economic association of Russia, Belarus, Kazakhstan, Armenia and Kyrgyzstan.

The union has an integrated single market of 183 million people and a gross domestic product of over $4 trillion.

On June 27, after the approval of a parliament bill for setting up an economic union between Islamic Republic of Iran and five Eurasian countries, the Guardians Council verified the bill.

The Guardians Council is a watchdog that ensures laws are in line with the Iranian Constitution and Islamic principles.

Iranian President Hassan Rouhani signed into law the interim agreement on establishing a free trade zone between Iran and EEU in July. Subsequently, the president notified the law to the Ministry of Industries, Mining and Trade.

According to Armenia’s Minister of Economy Tigran Khachatryan, the agreement has been ratified by all five EEU members.

Iranian Energy Minister Reza Ardakanian said Iran’s exported goods to Russia, Kazakhstan, Belarus, Armenia and Kyrgyzstan will enjoy zero tariff within the framework of Iran’s free trade with EEU. This is the first time Iran enters into a regional economic agreement actively since the Islamic Revolution in 1979.

According to the press service of the Eurasian Economic Commission, the agreement will come into effect on Oct. 27.

Ardakanian says a total of 850 types of goods will be entitled to preferential tariffs once the trade deal between Iran and the Eurasian Economic Union takes effect.