The last four years saw imports of tobacco products worth nearly $1 billion, says spokesman of the Islamic Republic of Iran Customs Administration, Rouhollah Latifi.
“Cigarette imports stood at $32.03 million in the year ending March 2017; $16.36 million in the year ending March 2018; $23,034 in the year ending March 2019 and $298 in the year ending March 2020,” Latifi was quoted as saying by Mehr News Agency.
“But the overall import of tobacco products stood at $238.79 million in the year ending March 2017; $210.9 million in the year ending March 2018; $214 million in the year ending March 2019 and $218.21 million in the year ending March 2020.”
Tobacco products worth $926.92 million were imported over the last four years, of which $48.41 million were cigarette imports, he added.
Latest data from the Ministry of Industries, Mining and Trade say a total of 7.58 billion cigarettes were smuggled into Iran during the seven months to Oct. 21, indicating an 8.9% increase compared with the corresponding period of last year, Mehr News Agency reported.
An estimated 37.91 billion cigarettes were smoked during the period, registering no significant change year-on-year.
The report added that cigarette exports stood at 71 million during the period, indicating a 42% YOY increase.
Local production stood at 30.2 billion, registering a 2.6% decline year-on-year.
The government has banned the import of cigarettes to Iran for a long time now, leading to a surge in smuggling into the country.
There are 23 cigarette producing companies and 39 tobacco producing companies in Iran.
The number of cigarette manufacturers in Iran increased from seven companies with an annual output of 29 billion cigarettes in the year ending March 2015 to 12 companies with an annual output of 45 billion cigarettes in the year ending March 2017 to 23 companies with an annual output of 55 billion in the year ending March 2020.
According to a report by the Persian economic daily Donya-e-Eqtesad, citing statistics by Industries Ministry, two leading international manufacturers of cigarettes, namely British American Tobacco and Japan Tobacco International, accounted for more than 60% of total cigarette production in Iran last year (March 2019-20).
The report puts the total turnover of tobacco industry in Iran at 300 trillion rials ($1.15 billion) last year.
Misguided policies regarding the tobacco industry, restrictive regulations and lack of thoughtful planning have reduced the output of Iranian Tobacco Company in recent years, says a member of the company’s board of directors.
“ITC’s production last year [March 2019-20] reached around six billion cigarettes compared with nine billion in the year ending March 2019 and 12 billion in the year ending March 2018," Payam Hamedani-Mojarrad was also quoted as saying by ISNA.
The oldest Iranian tobacco company has 81 production lines and is capable of producing 40 billion cigarettes annually to meet 50% of the domestic demand. However, according to the official, the government has yet to decide whether it is willing to improve its presence in tobacco industry – one of the top five high-yielding industries in the world.
“As we speak, ITC has nearly 5,000 people on its payroll and purchases tobacco from 15,000 farmers, suggesting that it has created 20,000 direct and indirect jobs that could increase to 100,000 if the government were to create the right climate.”
Noting that imports account for 60-70% of 80 of the raw materials needed in cigarette production, Hamedani-Mojarrad said, “Petrochemical and other domestic industries have the potential to supply much of the raw materials, including essences, cigarette paper and the packaging materials of the products.”
Iranian Tobacco Company was established in 1937 and totally owned by the government before 2013 when part of its shares was handed over to Iran Steel Pension Fund.
The average goods and services Consumer Price Index of “tobacco” in the 12-month period ending Nov. 20, which marks the end of the eighth Iranian month, increased by 21.8% compared with the corresponding period of the year before.
According to the Statistical Center of Iran, the CPI of “tobacco” among 12 groups of the basket of consumer goods and services purchased by households stood at 420.9 in the period, indicating a 6.2% rise compared with the month before.
The tobacco index, which has minimum impact on total inflation rate with a coefficient of 0.59%, registered a year-on-year increase of 50.7%.
