Tuna Fish Canning Plants on Brink of Collapse

EghtesadOnline: Fewer than 30 out of 135 canned tuna fish factories in Iran are operating, that too under 20% of the capacity.

News ID: ۷۵۰۷۸۰

23 August 2020

Per capita fish consumption in Iran is less than half the global average. “Iran ranks 100th in fish intake and fourth in canned tuna fish consumption in the world,” says Masoud Bakhtiari, the deputy head of Food Canning and Preservation Industry Syndicate.

Noting that the domestic canned tuna fish industry is on the brink of collapse, Bakhtiari said, “Problems facing the industry are to blame on misguided decisions taken by the government. Its failure to provide forex needed for imports and the decline in domestic fishing have increased costs, but companies are not allowed to raise prices in line with their expenses. The government not only discontinued the allocation of subsidized foreign currency to import tuna, but it also does not supply importers with forex from the so-called secondary FX market, known by the Persian name Nima.

Imports have declined to 20,000 tons from 50,000 tons before, he was quoted as saying by Fars News Agency.

Nima is an online platform affiliated to the Central Bank of Iran where exporters sell their overseas currency income and companies buy it for importing goods, machinery, equipment and raw materials. Currencies procured through Nima have price tags lower than open market rates.

“Canned tuna fish industry needs at least $50 million to leave the current crisis behind,” Mohammad Mir-Razavi, the head of the syndicate, said. “This is while Iran exports $500 million worth of seafood annually.”

According to Nabiollah Khounmirzaei, the head of Iran Fisheries Organization affiliated to Agriculture Ministry, seafood production is estimated to stand at 1.5 million tons by the end of the current Iranian year (March 2021) to register a 15% rise compared to the previous year's output.

“The price per tinned standard tuna (180 grams) is set at 270,000 rials [$1.16] whereas producers have to spend 300,000 rials ($1.29) to make one. If the current situation persists, up to 60,000 people will lose their jobs as the plants are highly likely to close one by one,” Mir-Razavi said.

“Three months ago, we imported 300,000 tons of tuna fish from China,” Seyyed Jalaleddin Bani-Hashemi, another industry player, said.

“However, we have failed to clear our imports from the customs and have even paid more than 20 billion rials [$86,000] in demurrage costs. The government shouldn’t have granted import permits in the first place. Now that it has, the Central Bank of Iran is obliged to provide foreign exchange. Who will assume the responsibility for the damage caused to producers?”