The Agri-commodity and food sector in Iran is expected to grow significantly in the years to come.
Iran is one of the largest economies in the Middle East and is characterized by a growing population and a rising income of the citizens. The country plays a large part in the consumption of agri-commodities in the region. There is a growing demand for food products and the production capacity of the country is often found struggling to meet the same. This growing demand for food is fueled by continuous growth in population, an increase in the middle class, and also an increase in urbanization.
Recently, a decades-long nuclear-related sanction against Iran was lifted after the implementation of the Joint Comprehensive Plan of Action (JCPOA) on 16 January 2016, which has put the focus back on the agri-commodity market in the nation. The GDP of the country has grown by around 4 – 5 percent since the lifting of the sanctions. This trend is also expected to continue in the years to come.
The Iranian agri-commodity and food market
The country is working towards attaining self-sufficiency in the agricultural and food sector which is being reflected in the policies implemented since the Iranian revolution in 1979. The underlying objective of the policies is to ensure food security for the population. The food sector is regulated with the government imposing import duties and quotas on international exports.
The country is dependent on food imports from India.
Iran is self-sufficient in the production of vegetables and nuts, in fact, the country has the largest production of pistachio nuts, saffron, and berberis. The country imports red meat, butter, fish, fruit, and wheat, a dependence that is expected to continue for the foreseeable future.
In the sector of processed food, there are few varieties available. There is a lot of scope for the modernization of the sector and the import of specialized products from other nations.
Factors adversely affecting the agri-commodity and food sector
- Problems of water shortage and salinization of land, making important natural resources inaccessible to farmers
- Use of small-scale farms for residential and commercial purposes
Due to these factors, the food production in the country is expected to decrease and it is not quite clear whether the country would be able to cater to the rising food consumption in the coming years. This translates into rising imports of agricultural products and food into the country over time.
Agri-trading trends of India and Iran
In 2015, India and Iran had agreed to cooperate in the agricultural commodities trading sector and promote trade in rice, wheat, and oilseeds. The areas where both the countries decided to work together are agricultural research, technical collaboration in fisheries, and cooperation in seed and fodder development.
In the year 2014-15, total export of agricultural commodities from India to Iran was of the order of US $ 1687.03 million. India’s principal exports during this period were tea, barley, rice, sesamum, cane sugar, oil-cake, etc. During the same period, import from Iran was of the order of US $128.69 million and the principal items of import were almonds, pistachios, dates, etc.
India supplies more than one-third of Iran’s demand for sugar and rice. During the first quarter of 2020, Iran imported approximately 700,000 tons of basmati rice from India. Other products that are exported from India to Iran include barley, sesamum seeds, cane sugar, etc. The imports from Iran include almonds, pistachios, dates, and saffron, etc.
B2B Platforms that facilitate trade
The import of agricultural products and food to Iran is expected to increase over time. You can also start selling to buyers in Iran by registering yourself with Tradologie.com, the world’s first B2B platform that facilitates trade in Agri commodities without a phone call or an email. This B2B platform helps you trade with Iran and other countries of the world cost-effectively and without having to be physically present anywhere, from inquiry to delivery.