May/June 2022 ¦ international-dairy.com · 29
Iran experiences a lack
of foreign equipment
in Iran became so scarce that farmers started using fruits and vegetables
as feedstuff. He added that under the government policy,
the available feedstuff is firstly distributed among poultry farmers
and only next to dairy cows.
In the background of rising retail prices, the Iranian dairy products
consumption per capita slumped to 50 kg, the lowest level ever
seen, Mohammad Farbod, a member of the board of the Iranian
Dairy Industry Association, said. People can no longer afford to
consume dairy products in the desired quantities, he admitted.
The falling demand could become a problem for Iranian business
as the country already produces more dairy products than
it can consume. Farbod said that Iran produces roughly 8 million
tonnes of raw milk, of which 10% or 800,000 tonnes is used
to manufacture products destined for export. Iran exports milk,
cheese, yogurt, buttermilk, cream, kefir, butter, ice cream, industrial
milk powder, and whey powder, Farbod said, adding that cheese
remains the largest export item, with 100,000 tonnes of foreign
sales last year.
"In developed countries, the minimum hourly wage is $ 10
while in Iran, the minimum hourly wage is about $ 1, and on the
other hand, the price of raw milk in our country is close to the
world's average," Farbod said, adding the government officials are
always proud to say that Iran is self-sufficient in most dairy products
but say little to nothing about the current price situation.
"If the situation continues like this, we will naturally be selfsufficient
in everything because people will no longer have only a
small ability to buy food products," Farbod said.
Ali Ehsan Zafari, CEO of the Dairy Cooperatives Union, said
that the per capita dairy consumption in Iran is yet to hit bottom,
and the Iranian government must interfere with production subsidies
to improve the market situation. Strong concerns are lingering
over the balance between supply and demand on the Iranian dairy
market, especially since exports leave a lot to be desired.
"Dairy exports from Iran are decreasing day by day, and we
also see that some dairy products are being smuggled out of the
country," Zafari said.
In this background, some dairy producers voiced fears over a
possible surplus of raw milk similar to the one Iran experienced in
2015, when a sharp decline in domestic consumption created a
daily oversupply of 2,700 tonnes of milk. Quite a few milk farms
went bankrupt and stopped operation in the country, and there
are fears the same situation can happen all over again.
A group of Iranian dairy companies called the government to
withdraw export duty on milk powder of 16,000 tomans to stimulate
Siavash Salimi, chairman of the board of directors of the Industrial
Dry Milk Association, commented: "Currently, we have a
production surplus, and producers are selling their products at a
loss, so that their production wheel would just keep turning and
providing at least some liquidity."
"There are currently 25,000 tonnes of milk powder stored in
the warehouse of several producers. There is no doubt that this
amount of production will not be absorbed in the domestic market,
and we have no choice but to export it," Salimi said.