A total of 58.7 billion cigarettes were produced in Iran in the last Iranian year (March 2020-21), registering a 7.1% growth compared with the year before.
Cigarette exports stood at 357 million during the period, indicating a 131.8% year-on-year increase, ISNA reported, citing the Ministry of Industries, Mining and Trade’s data.
Given the estimated consumption of 65 billion cigarettes annually and the ban on imports, an estimated 6.61 billion cigarettes must have been smuggled into the country in the last Iranian year that ended on March 20. The figure indicates a 35.9% decrease compared with the year before.
Tobacco output rose 72.5% to reach 4,419 tons during the period under review.
ITC Output Up 50%
The Iranian Tobacco Company produced over nine million cigarettes in the last fiscal year (ended March 20, 2021), which indicate a 50% increase compared with the year before, says Siavash Afzali, the company’s managing director.
“ITC’s share of Iran’s tobacco market improved from 5% to 12-14% last year. Annual cigarette consumption in Iran stands at 75 billion. Last year, a total of 55 billion cigarettes were produced in Iran, of which ITC produced 9.1 million and the rest, i.e., 70% of the market demand, were met by Japan Tobacco International and British American Tobacco,” he was quoted as saying by IRNA, adding that about 20 million cigarettes were smuggled into the country in the year ending March 21.
He put the value of Iran’s tobacco market at 400 trillion rials ($1.6 billion) and said, “ITC has the capacity to produce 25 billion cigarettes annually. It has 6,000 people on the payroll. A total of 6,000 farmers are working with the company.”
Noting that the company’s sales, production and share from the market increased by 23%, 50% and 70% last year, Afzali said, “Five batches of tobacco weighing 10 tons each were exported to Russia and Arab countries last year but export is not financially viable due to the high import tariffs of other countries.”
The ITC chief said one of the goals of ITC in the current year is to make products with less smoking-related health risks.
“So we had negotiations with a European company in order to jointly produce smokeless tobacco named Snuff. The permit has been secured from the Ministry of Industries, Mining and Trade while the Health Ministry’s permit is yet to be obtained.”
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 23 companies with an annual output of 55 billion in the year ending March 2020.
Rise in Prices
The rising demand by distributers has driven up the prices of cigarettes, says Mohammad Reza Tajdar, chairman of Tobacco Products Importers and Exporters Association.
Given the new tax envisioned in tBhe udget Law of fiscal 2021-22, which is between 2.5 million rials and 5 million rials [$10-$20] per cigarette carton, the price of each pack of cigarettes has risen by 10,000 rials [four cents],” he was quoted as saying by ILNA.
Noting that workers’ remunerations will increase by 30-40% and fuel and transportation expenses are bound to go up as well, Tajdar said as a result, cigarette prices increased by 10% to 30% depending on their brand as of the Iranian month starting April 21.”
Latest data released by the Statistical Center of Iran show the average goods and services Consumer Price Index in the 12-month period ending May 21, which marks the end of the second Iranian month of fiscal 2021-22, increased by 42.3% compared with the corresponding period of the year before.
The CPI of tobacco stood at 463.3, indicating a 3.1% rise compared with the month before.
The index, which has minimum impact on total inflation rate with a coefficient of 0.59%, registered a year-on-year increase of 46.6%.
