Agrifood Trade Deficit Widens

EghtesadOnline: Agrifood exports from Iran are on the decline, as imports rise significantly.

News ID: ۷۸۷۶۳۹

17 January 2022

Latest data released by the Agriculture Ministry show Iran exported 6.26 million tons of agricultural and food products worth $3.88 billion during the current fiscal year’s first nine months (March 21-Dec. 21).

The figures indicate a 0.47% decline in tonnage and a 14.32% decrease in value compared with last year’s corresponding period.

Pistachio topped the list of exports in terms of value by earning $738.61 million.

Tomato was the second major agricultural export product in terms of value with $288.73 million, followed by watermelon with $185.78 million, dates with $185.66 million and apple with $169.14 million.

In terms of tonnage, watermelon topped the list with 795,360 tons, followed by tomato with 616,520 tons, potato with 598,160 tons and apple with 598,160 tons and onion, shallot and garlic with 284,140 tons.

Agronomical products accounted for 4.01 million tons worth $1.41 billion of total exports, down 0.44% in terms of tonnage and down 11.07% in terms of value year-on-year.

Horticultural exports amounted to 1.71 million tons worth $1.88 billion, up 4.82% in terms of tonnage and down 14.97% in value YOY respectively.

Exports of livestock and poultry products reached 442,510 tons worth $405.95 million, down 17.66% in tonnage and 25.45% in value YOY.

The veterinary sector exported 786 tons of products worth $7.35 million, up 19% and 25.68% in weight and value YOY respectively.

The fisheries sector exported 87,690 tons worth $159.08 million, posting a rise of 7.13% in total volume and a fall of 1.08% in value respectively YOY.

Exports from the forest and rangeland sector hit 14,290 tons worth $20.46 million, down 9.38% and 15.06% in tonnage and value respectively YOY.

Iran exported 8.83 million tons of agricultural and food products worth $6.21 billion during the last fiscal year (ended March 2021).

Imports accounted for 23.41 million tons worth $13.08 billion during the period, indicating a 31.63% and 67.39% growth in volume and value respectively year-on-year.

Feed corn had the biggest share of imports in terms of value with $2.35 billion, followed by wheat with $1.72 billion, GM soybeans with $1.2 billion, sunflower oil with $1.1 million and soymeal with $1.09 billion.

In terms of tonnage, feed corn topped imports with 6.89 million tons, followed by wheat with 5.03 million tons, barley with 2.68 million tons, soymeal with 1.97 million tons and GM soybeans with 1.82 million tons.

Agronomical products accounted for 22.16 million tons worth $10.99 billion of total imports, up 31.07% and 73.91% in tonnage and value respectively YOY.

Horticultural products stood at 1.09 million tons worth $1.33 billion, up 45.5% and 52.14% in tonnage and value respectively YOY.

Imports of livestock and poultry products hit 125,750 tons worth $397.89 million, up 60.38% in tonnage and up 15.19% in value YOY.

The veterinary sector imported 4,316 tons worth $295.83 million, up 116.54% and 51.77% in tonnage and value respectively YOY.

Imports by the fisheries sector amounted to 9,090 tons worth $23.9 million, down 45.85% and 36.26% in tonnage and value YOY.

The forest and rangeland sector’s imports totaled 25,040 tons worth $41.71 million, down 25.12% and 1.76% in tonnage and value YOY.

The export and import volumes indicate that Iran recorded an agrifood trade deficit of 17.15 million tons in tonnage and $9.21 billion in value during the first nine months of the current Iranian year.

Impact of Drought

The growth in agrifood imports comes amid rising import of essential goods amid a decline in production, which is partly due to water shortage and drought.

Also known as necessity or basic goods, essential goods are products consumers will buy, regardless of changes in income levels.

In a report, Iran Chamber of Commerce, Industries, Mines and Agriculture has warned agricultural officials of an imminent drought that would cripple the country’s agricultural activities and hamper economic growth in this sector in the current Iranian year (March 2021-22).

The ICCIMA report says precipitation levels have fallen drastically, Mehr News Agency reported.

The Majlis Research Center has released a list of Iranian provinces in a critical state of water shortage: Isfahan, Hormozgan, Sistan-Baluchestan, Ardabil, Fars, Markazi and Khorasan Razavi.

Drought has inflicted 670 trillion rials ($2.4 billion) in losses on Iran’s agriculture sector since the beginning of the current crop year, Mohammad Mousavi, director general of the Agriculture Ministry’s Crisis Management Department, said in June 2021.

Assessments carried out over 11.2 million hectares of farmlands in 30 provinces show 43% of the total losses pertained to the decline in production of agronomic crops, as well as 26% to horticultural products, 13% to fisheries and livestock, and 11% to forage crops, he said in June.

“In addition, 4% of the total damage are to blame on challenges created in water transportation infrastructures, pools, pipes, qanats and springs, and 3% of losses can be attributed to water supply complications and the animal feed used by nomads,” he was quoted as saying by Mehr News Agency.

Noting that precipitation rate in the current crop year has decreased by 54% compared with last year and 41% compared with the long-time average, the official said, “Beside the decline in precipitation rate, increase in heatwaves and evaporation and the inappropriate distribution of rainfalls have resulted in drought that had adverse consequences for the agriculture sector.

“Reports by Iran Meteorological Organization show that 92% of the country have been affected by drought at different levels: 20% of the country’s area are facing extreme drought, 28% severe drought, 25% moderate drought and 19% of the country are going through stages of becoming abnormally dry; only 8% of the country are having normal conditions.”

Mousavi noted that the emergency plans put together by Agriculture Ministry underline the management of strategic reserves, animal feed and essential goods in proportion to the decline in production.

“Easing pressure on groundwater resources and soil in the country and fair distribution of water shortage in different sectors, when used as potable water, or in agriculture and industrial sectors, have been underscored in this plan,” he said.

Agrifood Shipments Worth $9m Sent Back

A total of 14,096 tons of Iran’s exported agrifood consignments worth $9.19 million were sent back by nine of Iran’s export destinations during the first eight months of the current Iranian year (March 21-Nov. 21) due to failure to meet standards, according to the spokesperson of the Islamic Republic of Iran Customs Administration.

“Russia returned 11,132 tons of Iranian agrifood products worth close to $3.3 million during the period,” Rouhollah Latifi was quoted as saying by the Persian daily Ta’adol.

Russia recently sent back 37 trucks loaded with Iranian bell pepper from Dagestan border crossing.

In the eight months, consignments of palm trees, potatoes and kiwis have been returned by destination countries.

Other countries that sent back similar consignments, the IRICA official noted, were the UAE (688 tons $2.45 million), Turkmenistan (501 tons worth $1.29 million), Turkey (784 tons worth $998,425), Afghanistan (715 tons $478,699), Iraq (147 tons worth $352,448), Spain (64 tons worth $196,119), Belarus (35 tons worth $85,423) and Azerbaijan (26 tons worth $30,601).

Latifi noted that given the figures pertaining to retuned export goods over the eight months, Iranian exporters will face roadblocks in international markets if domestic export policies are not rectified to better meet global standards.