High levels of sugar imports have caused an oversupply of the product, putting pressure on domestic producers, according to comments made by senior officials.
IRNA news agency interviewed Mohammad-Mahdi Rasekh, member of Tehran Chamber of Commerce, who stated that sugar has been imported at an unprecedented level despite robust domestic production. “Despite domestic production capacity of 1.7 million tons a year, of which 750,000 tons come from beet and 950,000 from cane, unfortunately sugar imports have been running at 2.5 million tons a year since 1385 (2006-7), severely damaging this industry,” he said adding that yearly sugar consumption stands at only two million tons.
According to Rasekh, the responsibility of sugar imports lies with the ministry of agricultural Jihad. Although the ministry has issued a full ban on sugar imports, estimates point out that since late November 834,000 tons of pre-ordered sugar have been imported. An additional 700,000 tons have been stored in already-full reserves from earlier imports.
Rasekh also lashed out at some influential traders who have been “exerting pressure” to allow sugar imports, even though they are formally banned and domestic factories have been loudly calling for an end to imports. Rasekh further argued that these traders import from Brazil and seem to have built up links with producers there.
Excess supply has caused a severe drop in the price of sugar. Official estimates of sugar prices put it at 21,000 rial per kilo (about $0.6), while market prices have been fluctuating around 19,000 rial. Domestic producers now fear they could go bankrupt amid falling prices.
