Diaper Market in Disarray

EghtesadOnline: Producers of diapers now have to purchase the foreign exchange required for importing some of their raw materials through the Forex Deals Integrated System (known by its local acronym Nima).

News ID: ۷۸۳۹۰۳

04 September 2018

Rates are closer to market rates at Nima, whereas previously they were entitled to foreign exchange at subsidized rates. This, according to the director general of the Ministry of Industries, Mining and Trade’s Chemical and Cellulose Industries Bureau, has caused problems for the diaper sector.

Parvin Nabati also called on related officials to avoid imposing restrictions on the import of raw materials and ease customs clearance procedures so that domestic diaper production can continue, IRNA reported.

Recently prices of diapers and sanitary pads have surged, as the market is facing shortage of these products, Financial Tribune reported.

“There are close to 150 factories producing diapers and related products in Iran with a nominal capacity to produce 280,000 tons per year. In the last fiscal year (March 2017-18), production stood at around 125,000 tons. We are capable of meeting the entire domestic demand with high quality products,” the official said.

The market, Nabati added, will soon go back to normal if the Islamic Republic of Iran Customs Administration speeds up clearance procedures and the government allocates the required foreign exchange for importing raw materials at subsidized rates.

According to Nima Basiri, deputy head of Iran Chamber of Commerce, Industries, Mines and Agriculture’s Industrial Affairs Commission, nearly 50% of the raw materials used in the cellulose industry are imported, hence the increase in foreign exchange rates has impacted end prices.

“Transportation fees have also increased from 8% to 20%, which is another reason for the recent growth in prices,” he added.

China, the US, South Korea and Canada are the largest exporters of raw materials used in cellulose industry to Iran.