Iran’s Food Industry Growing at Fast Rate

EghtesadOnline: Sustainable food production and supply are indispensable for a nation’s survival and security.

News ID: ۷۷۸۰۲۷

30 July 2017

Agriculture sector plays a strategic role in ensuring the same and promoting economic development. Inattention to the sector could have unpleasant consequences for the economy.

Speaking to Financial Tribune, Mehdi Karimi Tafreshi, the head of the board of directors at Iran’s Food Producers Cooperatives, explored different aspects of Iran’s food industry.

A Glance at Figures

According to Tafreshi, Iran has 50 million hectares of farms, of which 20 million hectares are under cultivation. Over 100 million tons of food products are produced in the country annually, Financial Tribune reported.

The agricultural sector, he said, had a good performance in the last Iranian year (March 2016-17), as the volume of domestic production increased by 13.5% and trade deficit in this sector decreased.

Iran’s trade deficit in the agriculture sector reached $3.4 billion last year, IRNA reported.

Among the constructive measures taken last year, Tafreshi referred to boosting the strategic wheat reserves, regulating the import of vegetable oil and oilseeds under the condition of purchasing domestic production, managing import tariffs for rice and sugar, preventing import of foreign fruits and increasing the export of livestock and fishery products.

He noted that livestock corn worth $1.413 billion, soybean worth $909 and rice worth $690 were the main crops imported last year.

According to the official, many raw materials in this industry need to be imported.

“Today, foreign products such as macaroni, sauce, jelly candies, biscuit, gum, chocolate, tuna fish, spice, juice, compote, different kinds of vegetable oil, especially olive oil, and canned food from countries such as Thailand, Singapore, Italy, Spain and at times Turkey have found their way into Iranian stores, a phenomenon that has opened doors for opportunists and middlemen to cripple domestic production,” he said.

Tafreshi added that Iran’s food imports witnessed 14% and 13% declines in value and volume respectively in the fiscal 2015-16 compared to the previous year.

On the export front, IRNA reported that 1.178 million tons of food products worth $2.7 billion were exported to more than 80 countries last year, registering an 8% increase in value compared to the year before.

Dairy products had the biggest share, standing at 387,000 tons worth $634 million, up by 9.3% and 19% in volume and value respectively year-on-year.

According to Tafreshi, the value of Iranian food and health market is estimated at $50 billion.

What Iranians Eat More

Iranians love bread. Tafreshi said each Iranian annually eats 160 kilograms of bread on average, while the global average stands at 25 kilogram. In other words, Iranians consume six times more bread than the global average.

Iranians also have a high sugar consumption rate, which is five times higher than the global average.

The official said per capita sugar consumption stands 21-24 kilograms in Iran, whereas the global average is only 5 kilograms.

Iranians also consume too much salt. According to World Health Organization, the global average of salt consumption is 10 grams per person, which is twice the amount WHO recommends. Iranians consume 2-3 times more than this amount.

Carbonated beverages are also very popular in Iran. Iranians drink an annual average of 42 liters of carbonated beverages while the global average is 10 liters.

Olive oil, milk, rice, meat and eggs are among food items with lower consumption rates in Iran compared with the global average.

Biggest Employment Sector

According to the official, food industry is the biggest employer in Iran as “food industries account for 16.8% of the total industrial jobs in the country”.

He said there are 11,200 active production units in food and processing industries across the country, of which 56% are small.

Renewing the machinery in production lines with the help of cheap loans, he noted, is key to encouraging producers and players in this industry to use their full potential in improving production.

Tafreshi stressed that using the latest technology can help upgrade the domestic packaging industry on par with global standards.