With growth in Iran’s cigarette production and a noticeable decline in smuggling into the country, exports jumped by 285.8% in the first six months of the current fiscal year (March 21-Sept. 22) compared with the corresponding period of the year before, latest data released by the Ministry of Industries, Mining and Trade show.
A total of 28.73 billion cigarettes were produced during the period, which figure is 14% more compared with 25.12 billion cigarettes produced in the corresponding period of last year.
The number of smuggled cigarettes declined by 46% YOY to 4.05 billion from 7.45 billion in the same period of last year.
No official import was registered during the period, as there is a ban on cigarette imports.
A total of 275.1 million cigarettes were exported in H1, registering a 285.8% jump compared with 71.3 million in last year's similar period.
Cigarette consumption stood at 32.5 billion in H1, unchanged from last year's corresponding period.
A total of 24 domestic companies produced cigarettes in the first half of the current Iranian year, 9.1% (or 2 units) more compared to 22 in last year's corresponding period.
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 during 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.
Iranian Tobacco Company produced over 9 million cigarettes in the last fiscal year (ended March 20, 2021), which indicates a 50% increase compared with the year before, says Siavash Afzali, the managing director of the company.
“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 9.1 million were produced by ITC and the rest, i.e., 70% of the market, 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 to March 20.
The ITC chief 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 and a total of 6,000 farmers are working with the company.”
Noting that the company’s sales, production and market share 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 high import tariffs of other countries.
“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 to jointly produce smokeless tobacco named Snuff. The permit has been secured from the Ministry of Industries, Mining and Trade while another permit is awaited from the Health Ministry.”
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.
