Dairy Products at Forefront of Iranian Food Exports

Dairy products had the biggest share in Iran's food exports in the last Iranian year (ended March 20, 2017).

Experts believe dairy products can play a considerable role in Iran's non-oil exports by earning higher value-added for the economy, Jamejam Online reported.

Iran shipped $773 million worth of dairy products over the period, registering a 10% and 25% increase in volume and value respectively compared with the previous year.

"Among the exported dairy products, yogurt topped the list with $218 million, followed by cheese with $187 million, powdered milk with $129 million, and cream and ice cream with $120 million," Kaveh Zargaran, chairman of Agriculture Commission of Tehran Chamber of Commerce, Industries, Mines and Agriculture, said.

About 56,000 tons of dairy products worth $251 million were imported during the same period, a majority of which pertained to 46,000 tons of butter worth $184 million and 7,000 tons of powdered milk worth $50 million.

The above figures indicate that Iran's dairy trade saw a surplus of $523 million last year.

Referring to the considerable accumulation of 40,000-50,000 tons of powdered milk in Iran last year, Zargaran said all the surplus has been exported to international markets in the past three months with the aid of government subsidies.

"The government has allocated 1,500 billion rials (nearly $40 million) in export incentives, 340 billion rials ($9 million) of which have been paid so far. The incentives narrowed down the price gap of Iranian products in international markets and made it possible for them to compete," he added.

Zargaran believes Iran is now capable of competing in international dairy markets in terms of price. However, he thinks the quality and standards expected in destination markets are top priorities.

According to Food and Agriculture Organization of the United Nations, the global dairy sector is growing fast: World milk production is projected to increase by 177 million tons by 2025, at an average growth rate of 1.8% per annum in the next 10 years. Over the same period, per capita consumption of dairy products is projected to increase by 0.8% and 1.7% per year in developing countries, and between 0.5% and 1.1% in developed economies.

Because of the sheer size of the dairy industry, these growth rates can produce big development payoffs for people’s livelihoods, for the environment and for public health. The dairy industry also has good potential for job creation. Dairy producers are often organized in cooperatives or liaise with other value chain actors to process and sell milk and dairy products to consumers.

At the global level, skimmed milk (75%), cheese (12%) and butter (3%) represent over 90% of all processed milk. Processing activities, from pasteurization to yogurt manufacturing, not only add value to raw milk but also create jobs.

Overall, about 240 million people are likely to be directly or indirectly employed in the dairy sector. With an estimated 150 million dairy farms worldwide, it is likely that the dairy sector supports the livelihoods of up to one billion people worldwide.

According to FAO, Iran is among the medium-consumption countries with a dairy consumption rate of 30 to 150 kg per capita per year; other countries in this category are:  India, Japan, Kenya, Mexico, Mongolia, New Zealand, North and Southern Africa, as well as most of the Middle East, Latin America and the Caribbean.

Argentina, Armenia, Australia, Costa Rica, Europe, Kyrgyzstan, North America and Pakistan are among high-consumption countries consuming more than 150 kg per capita per year.

The low-consumption countries and regions consuming under 30 kg per capita per year include Senegal, most of Central Africa, and most of East and Southeast Asia.