A total of 180,000 to 200,000 hectares are estimated to have gone under oilseeds cultivation in the current crop year (September 2020-21), producing close to 600,000 tons, according to the director of Agriculture Ministry’s National Oilseed Project.
“This amount will only meet 18% of domestic demand and the rest needs to be imported … The government spends more than $4 billion per year to meet domestic demand for vegetable oils,” Alireza Mohajer was also quoted as saying by Young Journalists Club.
About a month ago, the official had told IRNA that the Agriculture Ministry estimates 550,000 hectares of farmlands will go under oilseed cultivation in the current crop year.
This volume, he added, will yield close to 900,000 tons of different kinds of oilseeds, which would mark a 50% year-on-year increase, provided farmers are encouraged to go along with the Agriculture Ministry’s plan.
However, Mohajer said on Saturday, that due to the significant rise in raw material prices, fertilizers and pesticides in particular, as well as the dissatisfactory guaranteed purchase prices, farmers have become reluctant to cultivate oilseeds, adding that the same thing happened last year.
The official noted that this year, 10 oil extraction factories have signed memoranda of understanding with the Agriculture Ministry, based on which they can sign contracts with farmers directly to purchase their products via “contract-based cultivation”.
“These factories have signed contract-based cultivation deals with farmers for the production of colza, soybean and sunflower seeds. They will provide the seeds, fertilizers and pesticides that farmers need for cultivation,” he said.
Mohajer also said that these factories will also insure the farmers and provide training on modern cultivation methods.
“The government has also set a guaranteed purchase price for oilseeds. Farmers can sell their products in the market at any price. Yet, if for any reason, there is a fall in prices in the market, the Government Trading Corporation will purchase their harvest at the guaranteed price,” he added.
The official said the guaranteed price for each kilogram of colza for this year’s cultivation (to be harvested next year) is set at 78,000 rials ($0.3).
The provinces of Golestan in the north, Ardabil in northwest and Khuzestan in southern Iran are top producers of colza oilseeds in Iran.
The ministry plans to achieve 70% self-sufficiency in the production of oilseeds under a 10-year program to keep imports of oilseeds and vegetable oil in check.
“The plan kicked off in late 2015. Our oilseed production stood at 46,000 tons in the fiscal 2014-15,” he told Young Journalists Club.
Mohajer noted that due to the reimposition of US sanctions on Iran, the Agriculture Ministry plans to expedite efforts to reach the 70% goal.
Per capita vegetable oil consumption in Iran, according to the official, is about 21 kilograms a year, while the global average is 12 kilograms.
Given the rise in global prices of unprocessed edible oils and other costs, consumer prices of products packaged in PET containers will increase by 10% and those packaged in other types of containers by 13% as per the recent decision of Market Regulation Headquarters.
“A total of 400,000 tons of unprocessed oils have been made available by the Government Trading Corporation of Iran, an affiliate of the Ministry of Industries, Mining and Trade, which is in charge of importing four essential items, namely sugar, rice, vegetable oil and wheat. The import of an additional 300,000 tons is in progress,” Abbas Qobadi, an official with the ministry, said recently.
Referring to the monthly consumption of 100,000 tons of unprocessed vegetable oil in Iran, Qobadi said, “To calm the turbulent market of edible oil, we’ve decided to increase both the import and production of hydrogenated fats, and step up distribution of this essential product,” he was quoted as saying by IRIB News.
“Reliance on the import of raw materials, high costs of machinery and their maintenance, and corrupt practices stemming from government’s allocation of cheap foreign currency are three main challenges of vegetable oil production industry,” Abolhassan Khalili, the head of Vegetable Oil Industries Association, said.
“Imports meet 90% of demand for unprocessed oil and oil seeds. That makes it all the more important to pursue development plans regarding expansion of oilseed crop cultivation areas more vigorously under current conditions,” he told Tehran Chamber of Commerce, Industries, Mines and Agriculture’s website.
“For the first time this year, vegetable oil factories have signed agreements with farmers, without an intermediary, for the production of oilseeds. Manufacturers of production machinery are based in Europe. Under the sanctions, it has become increasingly difficult and costly for producers to purchase and import spare parts.”
Over the seven months to Oct. 21, $933 million and $773 million have been allocated for the import of unprocessed oils and oilseeds, respectively. The actual provision of foreign resources for the import of unprocessed oils and oilseeds stood at $741 million and $664 million, respectively. It takes about one month from the allocation of forex to the time products are discharged from customs and enter the country.
