Decline in Imports of Livestock, Poultry Feed

EghtesadOnline: Imports of livestock and poultry feed saw a 10% decline in weight and an 18% decrease in value to reach 8.52 million tons worth $2.37 billion in the seven months ending Oct. 21, the news outlet of Iran Feed Grain Importers Union reported.

News ID: ۷۵۱۵۶۳

24 November 2020

A total of 5.84 million tons of corns worth $1.41 billion were imported over the period, indicating a 20% and 17% rise in weight and value respectively year-on-year.

Iran imported 1.09 million tons of barley worth $268.27 million during the seven-month period, which registers a 40% and 44% decline in weight and value respectively compared with the corresponding period of the year before.

Imports of soybean meal stood at 632,150 tons worth $258.77 million during the period under review. The figures show a year-on-year decrease of 44% and 48% in weight and value, respectively.

Seven-month imports of soybeans stood at 949,840 tons worth $437.75 million, posting a decrease of 44% in weight and 40% in value YOY.

70% Decline in Number of Importers

The number of importers of livestock and poultry feed raw materials decreased by 70% in the first half of the current year (March 20-Sept. 21).

According to Abolhassan Khalili, the head of Livestock and Poultry Feed Importers Union, there were 403 companies engaged in the import of livestock and poultry feed during the first half of the last Iranian year, which number has now fallen to 111 and counting.

“Unlike what most officials assume, money transfer is a much bigger problem than the amount of foreign currency allocated by the government. Transfer of foreign currencies other than the South Korean won, the Omani rial, the Iraqi dinar and the Pakistani rupee creates multiple challenges for importers. The 56% decline in imports of unprocessed vegetable oil, 60% soybean meals, 23% barley and the 35% decrease in oilseed import from March 20 to Sept. 11 compared with the corresponding period of last year are indicative of problems in the way of imports,” he was quoted as saying by IRIB News recently.

Shortage of poultry feed has become a growing problem, putting the entire poultry industry at risk.

According to Gholamali Fareqi, the head of Day-Old Chicken Producers Association, only broiler chicken farms have suffered 20 trillion rials ($67 million) in losses over the past six months.

Shortages of animal feed (corn and soybean meal) are expected to increase the prices of chicken and eggs in the coming months. This year’s (March 2020-21) imports of animal feed plunged by almost half of last year’s amount due to the rising value of US dollar and depreciation of local currency.

Blame Game

The poultry industry works by means of a simple mechanism, Mehdi Masoumi Isfahani, a member of Tehran Chamber of Commerce, Industries, Mines and Agriculture and an industry player, says.

“The timely supply of raw material guarantees the timely production of chicken and eggs. But it is the government that supplies raw materials and the Central Bank of Iran that allocates the needed foreign currency. The Agriculture Ministry is responsible for the level of output and the pricing is carried out by the Ministry of Industries, Mining and Trade. Therefore, chicken farmers have no say when it comes to making decisions and policies,” he told TCCIM’s news website.

“Whatever happens with the market, from price gouging to price cut to shortage of products or their abundance, it is the government that is responsible. Chicken farmers should not be blamed,” he added.

Since the beginning of the current Iranian year [March 20], the supply of poultry feed has been carried out in a disorderly fashion and as a result the market has been affected negatively.

Masoumi noted that government organizations need to collaborate with each other and chicken farmers will do their job, i.e., producing chicken and eggs.

According to reports, some chicken farmers had set up temporary chicken-breeding farms to secure cheap, subsidized poultry feed from the government and then sell the feed at free market rates.

Free market prices of animal feed are four times more than the government prices. Such practices are believed to be one of the main reasons behind the egg price increase of late.

“Importers of livestock and poultry feed are only the government’s designated agents in procuring the goods; they don’t have a role in the distribution of the products,” Abbas Hajizadeh, the secretary of Iran’s Livestock and Poultry Feed Importers Union, said.

“The president’s chief of staff [Mahmoud Vaezi] has recently claimed that middlemen engaged in the import and distribution of subsidized goods have caused food price increases. Importers as the first link in the supply chain of animal feed don’t play a role in the distribution and pricing of commodities. Importers of essential goods deliver products to those who have hawala transaction documents issued by the Agriculture Ministry, as soon as they clear their goods at ports and customs,” he said.