Iran Missing Out on Huge Global Halal Market

EghtesadOnline: Having produced nothing but halal food for a few decades, Iran has vast potential for exports, though it holds a negligible share in the massive international halal market.

News ID: ۷۷۲۳۸۳

17 December 2016

The scarcity of official statistics in Iran makes any assessment of production and exports difficult. The latest available official data go back to the Iranian fiscal year to March 2007, when Iran exported $260 million worth of halal food.

“It is estimated that Iran’s share of the $2 trillion global market currently stands at $250-300 million (annually),” Abolhassan Khalili, former secretary-general of the Federation of Iranian Food Industry Associations, told the Persian daily Forsat-e Emrooz.

Abdolhossein Fakhari, secretary-general of Global Halal Institute, puts Iran’s share at $5-6 million, way below Khalili’s estimate.

The difference can be explained by the fact that although 100% of Iran’s food exports are halal, not all exports are made under the official halal brand.

Reza Bafandeh, an expert in halal food industry, believes entering the global halal market requires the creation of brands and proper marketing.

“The halal brand is a guarantee that the product is healthy and safe to eat. Considering the fact that all Iranian products abide by this precept, there is great capacity for the country to turn into a major exporter of these products,” he said.

Halal is an Arabic word meaning “permissible” or “lawful”, the opposite being “haram”, which means “prohibited” or “unlawful”. The two terms govern almost every aspect of Muslims’ lives, including food, clothing, banking and traveling.

In recent years, halal has evolved in meaning to encompass a range of hygienic and high-quality food products, cosmetics, personal care products, leather goods and food ingredients.

Under the definition proposed by United Nations Food and Agriculture Organization in 1997, halal food incorporates not only production and processing procedures, but also the manpower, transport, storage and equipment used in different stages.

According to Pew Research Center, the number of Muslims worldwide is expected to increase to 2.8 billion in 2050 to make up 30% of the global population.

Technavio’s market research analysts expect the global halal food market to multiply at a speedy rate, with a CAGR of more than 14% during 2015-19.

Initially, halal food was consumed only by Muslims, but now they are favored globally by people of all religions and ethnic backgrounds, as they are known for being safe, hygienic, and quality.

With the rise in demand for halal food products, producers from non-Muslim countries such as the US, Brazil and Australia are keen to tap this opportunity, Financial Tribune reported.

“We have no proper strategy to enter the global markets,” Khalili said. “Countries with manufacturing capacity way lower than Iran have been able to generate substantial revenues from halal exports by making careful plans and improving standards in line with international regulations.”

Having shipped their products to the traditional markets of neighboring countries, mainly to Iraq and Afghanistan, domestic food factories have not felt the need to improve their standards on par with those of developed countries.

“We should manufacture products in accordance with the standards of destination markets,” Khalili said.

There are currently three organizations in charge of granting halal food license in Iran: a division of Iran Chamber of Commerce, Industries, Mines and Agriculture; Halal World Institute; and Iranian National Standards Organization.

According to the Islamic Chamber of Research and Information Center, 1,500 food companies have obtained halal brand license in Iran.