The agriculture sector has played a significant role in Iran’s non-oil exports, as it accounted for 14% of the country’s total non-oil exports value during the five years ending 1400 (March 20, 2022).
However, in recent years, the generation of export earnings in this sector has been associated with multiple challenges, according to a study conducted by the National Center for Strategic Studies of Agriculture and Water affiliated to Iran Chamber of Commerce, Industries, Mines and Agriculture. Some of the findings of this research are as follows:
Examining factors affecting agricultural export will help understand the issue and provide a solution. In this report, while evaluating a decade of agricultural export, agricultural export has been studied.
The survey of agricultural export shows that the tonnage of exports of agricultural and food industries increased from 3.7 million tons in the fiscal 2011-12 to 8.5 million tons in the fiscal 2021-22, while the value of exports decreased from $5.8 billion to $5.3 billion during the period. A comparison of annual growth rate of the tonnage and value of exports shows that the former stands at 8.6% and the latter at -0.8%, which signifies a drop in the price of exports.
Comparing the export price of non-oil products with that of the agricultural sector shows that the average export price of agriculture products is lower than the average price of non-oil products and that the export value of the former has had a decreasing trend.
In the fiscal 2011-12, each unit of agricultural and food industries products was exported with a value of $1.54 per kilo, which dropped to $0.62 per kilo in the fiscal 2021-22. In other words, valuable domestic resources (water, soil, energy, etc.) have been sold at declining prices.
Export Prices
In the first place, perhaps it seems that the decline in the export value of agricultural products is caused by falling global prices.
To check the issue, the index of the price of export unit (at the constant price of 2014-15), provided by the Food and Agriculture Organization has been used.
Checking the index of the price of agricultural exports of several neighboring and developing countries reveals interesting facts.
During 2018-20, Iran registered the lowest rise in the index of export price among selected countries. The status of Turkey and Pakistan is far better than that of Iran.
Agrifood Subsectors
In order to examine the export of agricultural and food industries, the export of sub-sectors was checked separately. The results of the investigation show that the agronomy sub-sector accounts for the largest volume of exports in terms of quantity.
The volume of export of crops increased from 1.4 million tons in the fiscal 2011-12 to 3.6 million tons in the fiscal 2021-22, showing an annual growth rate of 9.8%.
In terms of export value, the agronomy sub-sector with an annual growth rate of 1.7% reached from $703 million in the fiscal 2011-12 to $836 million in the fiscal 2021-22.
One of the most important issues is the price of agricultural export. In the fiscal 2011-12, the unit price of horticultural products had the highest rate with an average of $3 per kg. They were followed by livestock, poultry and aquatic products with $2 per kg, food products with $1.8 per kg, other agricultural products with $1.7 per kg and finally agronomical crops with $0.5 per kg.
In the fiscal 2021-22, the price of horticultural exports reached $1, livestock, poultry and aquatic products hit $1.1, food products $0.8, other agricultural products $0.8 and agronomical products $0.2 per kg.
In terms of quantity in the agronomy sub-sector, during 2011-21, on average, the share of watermelon and melon is 31.1%; potato ranks second with a share of 21.6%, and tomato stands at third place with 19%.
Considering that these products are perishable and have been exported in high volumes, it can be concluded that the export destinations are neighboring countries.
In terms of value, too, tomatoes during the period, with a share of 23.7%, ranked first, watermelon and melon ranked second with a share of 23.1%, and potato with a share of 17.2% ranked third.
In the horticulture sub-sector in terms of quantity, apple with a share of 40.2% ranked first. Dates with a share of 18.8% and pistachios with 12.2% stood at second and third place, respectively. In terms of value, during the period, the average share of pistachios out of the total export value of horticultural products, was 49.6%, to stand in the first place. Saffron with a share of 12% and dates with a share of 11% stood at second and third places, respectively. Due to the lower perishability of horticultural products, such as dried fruits, as compared to agronomical products, exports can be shipped to distant destinations.
In the sub-sector of livestock, poultry and aquatic products, in terms of quantity, the average share of milk and its byproducts was 79.9% during the period, and the share of fish and shrimp from the total export of this sector was 16.1% and 4%, respectively.
In terms of value, milk and its byproducts had an average share of 66.2%, fish 25% and shrimp 8.6%.
In the sub-sector of food products, the share of mineral water and soft drinks from the total export of this category was 38.8%; the share of cookies and chocolate was 13.4% and the share of tomato paste was 12.8%.
In terms of value, tomato paste, with a share of 13.5%, juice and compote with a share of 11.2% and biscuits and wafers with a share of 8.4% stood at first to third places, respectively.
Export Destinations
The survey of continental destinations of exports shows that the share of exports to Asian countries has increased during the past two decades.
The results of the survey show that in the fiscal 2001-02, European countries accounted for 41% of Iran’s agricultural exports that decreased to 19% in the fiscal 2020-21.
On the other hand, the share of the Asian continent jumped from 56% in the fiscal 2001-02 to 80% in the fiscal 2020-21, in other words, the export gateways to Europe for Iran were closed one after another.
The regional survey of agricultural exports shows that the Middle East recorded a higher share in the fiscal 2001-02 compared to the Commonwealth of Independent States member countries and neighboring states, as the share of Middle East in total agricultural exports was about 25% that decreased to 13% in the fiscal 2020-21.
The share of agricultural export value to CIS countries from the total agricultural exports has been almost uniform over time and increased from 7% in the fiscal 2001-02 to 10% in the fiscal 2020-21.
The share of the neighboring countries in the export value of agricultural products registered significant growth, reaching 52% in the fiscal 2020-21 from 18% in the fiscal 2001-02. In other words, neighboring countries accounted for 52% of the export value of agricultural products, which is indicative of the limited destinations for the export of Iran’s agricultural products.
The noteworthy point is that agricultural exports are limited to Iraq and Afghanistan, which increased from 29% in the fiscal 2001-02 to 77% in the fiscal 2020-21.
The value share of agricultural exports to Iraq and Afghanistan increased from 5% in the fiscal 2001-02 to 40% in the fiscal 2020-21. In other words, about half of the export value of agricultural products of the country was allocated to Iraq and Afghanistan.
The survey of export destinations, separately for each country, showed that Iraq’s share of the total agricultural exports increased from 3% in the fiscal 2001-02 to 40% in the fiscal 2020-21. In practice, 50% of Iran’s agricultural products are exported to Iraq.
From the fiscal 2001-02 to 2014-15, the UAE was the second destination for agricultural exports, but from that period, Afghanistan became the second destination for agricultural exports and the UAE stood at third place. Various factors lead to a decline in the diversity of export destinations.
