Huge Rise in Tobacco Production

EghtesadOnline: A total of 2,444 tons of tobacco were produced in Iran during the first half of the current fiscal year (March 21-Sept. 22), registering a 265.3% growth compared with the 669 tons produced in the similar period of last year, latest data released by the Ministry of Industries, Mining and Trade show.

News ID: ۷۸۷۴۵۷

20 December 2021

There are presently 43 tobacco producing factories in Iran, which figure stood at 36 last year, ISNA reported.

The ministry’s data also show 400.2 tons of mu’assel (hookah tobacco) were exported during the same period, registering a 445.8% rise compared with the corresponding period of last year.

Exports of fresh tobacco leaves stood at 1,544.4 tons, to register a 92.3% year-on-year rise.

According to Mohammad Reza Tajdar, the head of Tobacco Products Manufacturers, Exporters and Importers Association, mu’assel tobacco consumption in Iran was between 10,000 and 12,000 tons in the last Iranian year (March 2020-21), of which only 2,000-3,000 tons were produced locally.

“More than 8,000 tons of mu’assel are imported annually, mainly from the UAE, Jordan and Egypt.”

As a result of growth in Iran’s cigarette production and a noticeable decline in smuggling into the country, exports jumped by 285.8% in H1.

A total of 28.73 billion cigarettes were produced during the period. The figure is 14% more compared with 25.12 billion cigarettes produced in the corresponding period of last year.

The number of smuggled cigarettes declined by 46% YOY to 4.05 billion from 7.45 billion in the same period of last year.

No official import was registered during the period, as there is a ban on cigarette imports.

A total of 275.1 million cigarettes were exported in H1, registering a 285.8% jump compared with 71.3 million in last year's similar period.

Cigarettes consumption stood at 32.5 billion in H1, unchanged from last year's corresponding period.

A total of 24 domestic companies produced cigarettes in the first half of the current Iranian year, 9.1% (or 2 units) more compared to 22 in the last year's corresponding period.

A total of 58.7 billion cigarettes were produced in Iran in the last Iranian year (March 2020-21), registering a 7.1% growth compared with the year before.

Cigarette exports stood at 357 million during the period, indicating a 131.8% year-on-year increase, ISNA reported, citing the Ministry of Industries, Mining and Trade’s data.

Given the estimated consumption of 65 billion cigarettes annually and the ban on imports, an estimated 6.61 billion cigarettes must have been smuggled into the country during the last Iranian year (ended March 20, 2021). The figure indicates a 35.9% decrease compared with the year before.

Tobacco output rose 72.5% to reach 4,419 tons during the period under review.

The Iranian Tobacco Company produced over nine million cigarettes in the last fiscal year, which indicates a 50% increase compared with the year before, says Siavash Afzali, the company’s managing director.

“ITC’s share of Iran’s tobacco market improved from 5% to 12-14% last year. Annual cigarette consumption in Iran stands at 75 billion. Last year, a total of 55 billion cigarettes were produced in Iran, of which 9.1 million were produced by ITC and 70% of the market demand were met by Japan Tobacco International and British American Tobacco,” the ITC chief was quoted as saying by IRNA, adding that about 20 million cigarettes were smuggled into the country in the year to March 21.

He put the value of Iran’s tobacco market at 400 trillion rials ($1.6 billion) and said, “ITC has the capacity to produce 25 billion cigarettes annually. It has 6,000 people on its payroll. Moreover, a total of 6,000 farmers work with the company.”

Noting that the company’s sales, production and market share increased by 23%, 50% and 70% last year, Afzali said, “Five batches of tobacco weighing 10 tons each were exported to Russia and Arab countries last year but export is not financially viable due to the high import tariffs of other countries.”

He added that one of the goals of ITC in the current year is to make products with less smoke-related health risks.

“So we had negotiations with a European company to jointly produce smokeless tobacco named Snuff. The permit has been secured from the Ministry of Industries, Mining and Trade while the permit of Health Ministry is awaited,” he said.