A total of 203,578 tons of poultry meat were produced in Iran’s official slaughterhouses in the third month of the current fiscal year (May 22-June 21), indicating a 12% rise compared with last year’s corresponding period.
According to the Statistical Center of Iran, chicken accounted for 196,440 tons or 96.5% of the overall production while other types of poultry, such as turkey, quail, ostrich and partridge, amounted to 7,138 tons or 3.5% of the total poultry output during the period under review.
“Export duties on five agricultural products, including poultry meat, egg, baby formula, cream and fat, have been removed amid the surplus emerging in the domestic market,” Agriculture Minister Javad Sadatinejad said recently.
The decision came after prices in the local market shot up dramatically, following the liberalization of the prices of essential goods, for the import of which the Iranian government allocated heavy subsidies for years.
Now, instead of allocating cheap dollars at the rate of 42,000 rials per dollar, locally known as Preferential Foreign Currency, to import essential goods, including corn, soymeal, unprocessed oil, oilseeds and barley, in addition to wheat, flour and medicine, the government is depositing cash directly to the account of income deciles 1 to 9.
“Until now, we have been paying to producers [read importers] but now the subsidies go to consumers. In fact, the Preferential Foreign Currency has not been ceased, rather its allocation method has changed,” President Ebrahim Raisi said in a televised speech on the eve of introducing the move earlier this month.
In his speech, Raisi emphasized that the removal of cheap dollar allocation will not lead to a price rise in wheat, flour and medicine. However, the move has led to a dramatic rise in the prices of both essential and non-essential goods.
Also known as necessity or basic goods, essential goods are products consumers will buy, regardless of changes in income levels.
Concerns Over Poultry Industry Collapse
Iran could see mass closures of poultry farms in the next three months, as the government’s plan to tame food inflation with price caps make farm-gate prices extremely unjustified, a local newspaper Sarpoosh reported, citing local business groups.
Habib Asadollahnejad, CEO of the National Union of Broiler Farmers, told the publication that the average production costs in the industry were close to 50,000 tomans per kg ($1.5 estimated on the basis of the free market exchange rate), while the wholesale price is limited to 30,000 tomans per kg ($0.9).
“Under the current conditions, farmers lose the incentive to keep operating even though the authorities promise to give a helping hand in the form of subsidies for supporting their working capital,” he added.
The price is regulated by the Iranian government, which is struggling to control soaring food inflation.
The Iranian poultry industry has become accustomed to price caps over the past few years, taking advantage of animal feed subsidies and state aid provided in other forms. However, the gap between the government price and production costs has widened in 2022 due to a mix of factors, including the rising price of grain on the global market, and a slump in the exchange rate of the Iranian national currency, Poultry World reported.
According to Asadollahnejad, both small-scale broiler farmers and large production units are in trouble.
Mohammad Yousefi, a spokesperson of the National Union of Broiler Farmers, estimated that Iran produces nearly 2.3 million tons of broiler meat per year, but the production is decreasing by the day.
“The agriculture minister has given an ultimatum to producers that if they shut down farms, they would have to pay heavy fines. These warnings are irrational. If the government wants farms to keep running, it should buy chicken for 60,000 tomans [$1.81] per kilogram and sell it to people for 20,000 [$0.60] tomans per kilogram,” Yousefi said.
Hamid Kashani, chairman of Homeland Poultry Farmers Union, another poultry producers’ association, said egg producers have started sending hens to slaughterhouses, as the wholesale prices on the domestic egg market were by 50% below the real level.
Kashani explained that production costs have soared due to skyrocketing grain prices.
