Edible oil imports stood at 1.1 million tons worth $1.5 billion during the first six months of the current Iranian year (March 21-Sept. 22), registering a 173% and 351% growth in weight and value respectively compared with last year’s corresponding period.
Vegetable oil, mainly imported in unprocessed form, is considered an essential commodity and entitled to subsidized dollar at the rate of 420,000 rials per $1 for import, ISNA reported.
Also known as necessity goods, essential goods are products consumers will buy, regardless of changes in income levels.
The bulk of imports are palm oil from Malaysia and Indonesia, soybean oil from Argentina and sunflower oil from Ukraine and Russia.
According to the Statistical Center of Iran, the average price of liquid edible oils in the current fiscal year’s sixth month (Aug. 23-Sept. 22) saw a 1.9% decline month-on-month but a 78.1% growth year-on-year.
The average price of solid oils saw a 3% decline MOM but a 90.3% growth YOY.
Iran is 93% dependent on imports of edible oil raw materials and seeds, according to Yazdan Seif, the managing director of Government Trading Corporation of Iran.
The capacity of Iran’s oilseed processing factories stands at 5.4 million tons per year.
Per capita vegetable oil consumption in Iran, according to the Agriculture Ministry, is about 21 kilograms a year while the global average is 12 kilograms.
Iran’s annual demand for unrefined vegetable oil is around 1.6 million tons.
“Outbound smuggling via eastern and western borders is to blame for the rise in prices of cooking oil,” Qasemali Hassani, the secretary of Food Wholesalers Union, said.
Abolhassan Khalili, the head of Vegetable Oil Industries Association, said reliance on imports of raw materials, high costs of machinery and their maintenance, and corrupt practices stemming from the government’s allocation of cheap foreign currency are three main challenges of vegetable oil production industry.
“Imports meet 90% of demand for unprocessed oil and oilseeds. That makes it all the more important to pursue development plans regarding expansion of oilseed cultivation areas more vigorously,” he said.
“Manufacturers of production line machinery are based in Europe. Under sanctions, it has become increasingly difficult and costly for producers to purchase and import spare parts.”
Khalili referred to the allocation of subsidized foreign currency at the rate of 42,000 rials per US dollar to import unprocessed vegetable oils by the government and said the policy gives rise to higher risk of corruption in imports and production, so the government needs to work out an alternative way to support low-income households.
A total of 2.2 million tons of oilseeds were imported to the country in the fiscal 2020-21, Mehr News Agency reported.
