Economy, Business And Markets

Demand for Poultry, Livestock Feed Mostly Met Via Imports

Demand for Poultry, Livestock Feed Mostly Met Via ImportsDemand for Poultry, Livestock Feed Mostly Met Via Imports

Soybean meal is an essential source of nutrition for poultry and livestock, which provides them with the required protein in their diet and is of utmost importance in producing meat and chicken.

While the global production of this oilseed amounts to 500 million tons annually, Iran imports close to 2.5 million tons per year, which accounts for over 70% of its domestic demand, the Persian daily Forsat-e Emrooz reported.

The product, which is extracted from soybeans, forms the bulk of poultry and livestock feed in Iran along with corn. The product’s strategic importance is such that in the summer of 2012, a few days’ disturbance in the imports and distribution of the seed resulted in major fluctuations in the price of chicken meat.

“The main livestock feed types used in Iran are soybeans, corn and sunflower seeds plus food supplements. Some 30% of our demand, that is almost 1 million tons of corn and 200,000 tons of soybean, are produced domestically and the rest is imported mainly from Brazil and Argentina,” says Mohammad Yousefi, the head of Iran’s Association of Chicken Farmers.

In recent years, due to western sanctions imposed on the country and difficulties in the way of imports, Indian traders entered the fray and were able to grab part of the market with their low-quality products.

“We import raw soybeans and after the oil is extracted from the bean, the remnants are used as feed. Nearly 25 oil extraction factories are operating in the country,” he said.

Yousefi noted that the main reasons for weak domestic performance in soybean production are limitation of water resources, as soybeans and corns are water-intensive plants, and scarcity of farmland.

“The processing and optimization of the nutritional value of beans are carried out in the country. This is done using both traditional and mechanized methods. The traditional method is very time-consuming and the mechanized process demands special machinery and equipment,” says Gholamreza Karimi, a business owner in the field.

Karimi spoke of the high investment and production costs involved and said to start a mechanized business, an adequate plot of land and storage space of about 1,000 to 1,500 square meters is needed.

“Also, the machinery and production lines need to be purchased, all of which are imported from countries such as Germany, Switzerland and Turkey. All in all, to start business 40 to 50 billion rials (close to $1.2-1.5 million at market exchange rate) is required,” he said.

He complained of the lack of liquidity and banking facilities, and the “unreasonable” tax hikes, which have all complicated the production process.

“The industry can create jobs in large numbers and be highly lucrative. About 500 production units are active in the country and some are trying to convert their traditional methods to at least semi-mechanized systems. But since there is no support offered by the government, their efforts are to no avail,” he added.

Karimi believes that Iran can take Turkey as an example.

“That country made serious investments in the field 15 years ago and has a notable share of the global market today. If support is granted and conditions become favorable for production, not only can we produce and process for our own domestic demand, but we can also venture upon exports,” he said.