70% Reduction in Poultry Feed Importers

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

News ID: ۷۸۵۶۴۷

04 October 2020

According to Abolhassan Khalili, the head of Livestock and Poultry Feed Importers Union, 403 companies were 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 government’s allocation of foreign currency. The 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 the import of unprocessed vegetable oil, 60% soybean meal, 23% barley and the 35% decrease in oilseed import from March 20 to Sept. 11 compared with the corresponding period of last year is indicative of import problems,” he was quoted as saying by IRIB News.

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, broiler chicken farms alone have suffered losses worth 20 trillion rials ($67 million) over the past six months.

The shortage of animal feed (corn and soybean meal) is expected to impact 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 volume due to the rising value of US dollar and depreciation of local currency.

Blame Game

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. The government supplies raw materials and the Central Bank of Iran 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 authority when it comes to making decisions and policies,” he told the TCCIM website.

Isfahani said whatever happens with the market, from price gouging to price cut to shortage of products or their abundance, the government is responsible; chicken farmers should not be blamed.

“Since the beginning of the current Iranian year [March 20], the supply of poultry feed has been carried out in a disorderly fashion, as a result, the market has been affected negatively. Government organizations need to collaborate with each other and we, chicken farmers, will do our jobs, i.e., producing chicken and eggs,” he concluded.

His comments come as, according to reports, some chicken farmers set up temporary chicken-raising coops 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 egg price increases 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 products,” Abbas Hajizadeh, the secretary of Iran’s Livestock and Poultry Feed Importers Union, said.

“The president’s chief of staff [Mahmoud Vaezi] recently claimed that middlemen engaged in the import and distribution of subsidized goods have caused a food price increase. Importers as the first link in the supply chain of animal feed don’t have a role to play 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 the goods at ports and customs,” he said.