A silo with a wheat storage capacity of 30,000 tons was launched in the southern Khuzestan Province’s Hamidiyeh County on Sunday in a ceremony attended by Agriculture Minister Kazem Khavazi.
“The private sector has invested 150 billion rials [$608,500] for the construction of this silo,” director general of Grain Affairs and Commercial Services Department of Khuzestan’s Agricultural Organization, Omid Jahan-Najadiyan, was quoted as saying by IRNA.
When the silo comes on stream, he added, the province’s total wheat storage capacity will reach 1.44 million tons, which is more than Khuzestan’s annual wheat yield.
Khuzestan is Iran’s biggest producer of wheat.
The Government Trading Corporation of Iran plans to purchase 10 million tons of wheat from local farmers at guaranteed prices in the current crop year (Sept. 2020-21).
“This will account for some 90% of domestic demand for this staple grain,” Qodrat Heydari, the deputy head of GTC, was quoted as saying by IRNA.
Noting that GTC is responsible for meeting domestic demand for bread, the official said it has to annually distribute around 10.5 million tons of flour to bakeries across the country.
The government bought 8.22 million tons of wheat from local farmers in 31 Iranian provinces over the last crop year (Sept. 2019-20), which indicated a 7% increase YOY. This amount of purchased wheat cost the GTC 207.8 trillion rials ($843 million), Mizan Online reported.
Khuzestan with 1.2 million tons, Fars with 911,000 tons and Golestan with over 820,000 tons topped the list of provinces from where the purchases were made.
GTC is the lever for enforcing market controls and maintains the supply of wheat, rice and cooking oil for the country’s strategic reserve of essential goods.
Considered a staple in Iran, wheat is purchased every crop year by the government to build up its reserves and supply the market over time.
According to CEO of the National Foundation of Elite Farmers Ali Khan-Mohammadi, domestic demand for this staple grain in Iran is around 12 million tons per year.
Plan to Import 2.3m Tons
The government plans to import some 2.3 million tons of wheat during the course of the current crop year to replenish its strategic reserves, according to the head of the National Wheat Farmers Foundation.
“Local farmers and our foundation are bitterly opposed to this decision. We believe that if the guaranteed prices are set reasonably and the government devises proper policies for the annual purchase of the grain, domestic production can sufficiently meet the country’s demand,” Ataollah Hashemi was also quoted as saying by Young Journalists Club.
The official added that due to faulty policies and low guaranteed purchase prices set by the government, farmers refrain from selling part of their harvest and high-quality wheat that is suitable for human consumption is used as livestock and poultry feed because it pays better.
Hashemi said wheat production is estimated to exceed 13 million tons in the current crop year, which is sufficient to meet domestic annual consumption and fill the government’s strategic reserves.
Esmaeil Esfandiarpour, the manager of Agriculture Ministry’s “Wheat Project”, recently told ILNA that 4.49 million hectares of land have gone under wheat cultivation so far this year, more than 1.27 million hectares of which are irrigated and 3.21 million hectares are rain-fed, registering a 7.4% and 3.7% increase respectively compared with the similar period of last year.
“We estimate that 6 million hectares of farms will go under the cultivation of this staple grain this year,” he said.
The official noted that precipitation has been favorable this year and ample yields are predicted.
Storage Capacity on the Rise
The government is building up its wheat reserves by constructing new silos across the country.
The construction of a 100,000-ton grain silo recently began in Chabahar's Shahid Beheshti Port.
The silo is being built on a 3.5-hectare area. It is expected to create about 200 direct jobs, Roads and Urban Development Ministry's news outlet reported. Invested in the development of the key project.
Increasing Chabahar's grain storage capacity is expected to help the port play a more significant role in goods transportation to/from Central Asian countries, particularly the Commonwealth of Independent States.
Chabahar, Iran’s sole oceanic port along its southeastern coast, serves as a transit route linking India, Iran and Afghanistan, bypassing Pakistan.
Another silo with a grain storage capacity of 100,000 tons is expected to be inaugurated in Semnan Province’s Garmsar County by the end of the current Iranian year on March 20.
This will be the largest silo in the east of the country, according to the CEO of the Government Trading Corporation.
“The Islamic Development Bank and the Iranian government have invested €18.96 million, in addition to 190 billion rials [$700,000] in the project respectively,” Yazdan Seif was also quoted as saying by ILNA.
The official noted that the silo, which has so far made over 90% physical progress, has been built on a 10-hectare plot and will be a great help in storing and distributing this strategic staple food in the country.
A contract was signed in June for the construction of another silo with a grain storage capacity of 30,000 tons in the northern Amirabad Port.
According to Director of Amirabad Special Economic Zone Mohammad Ali Saeedi, the contract is in the form of a BOT (build, operation and transfer).
This project is expected to be completed within two years.
“Presently, Amirabad has the capacity to store 235,000 tons of grains. More silos with a collective capacity of storing another 235,000 tons are under construction,” the official was quoted as saying by IRNA.
The new silo will be built on around 7,000 square meters of land and create 12 direct jobs for local people.
Amirabad is the largest port facility on the Caspian shore and the third largest in Iran. The 1,000-hectare port has nine berths, which can accommodate Ro-Ro vessels, trains and trucks.
Qodrat Heydari, an official with the Government Trading Corporation of Iran, a subsidiary of Agriculture Ministry, said Iran’s capacity for storage of strategic goods and grains has currently reached 21 million tons.
“The capacity of government-owned storage units stands at 5.5 million tons with 156 silos and mechanized or semi-mechanized storehouses, and that of private-owned units hovers around 15.5 million tons with 600 silos and mechanized storehouses,” Heydari was quoted as saying by IRNA.
“The government has no concern about food security, particularly about wheat. However, we definitely welcome further investment in sectors that need it most.”
