Economy, Domestic Economy

Huge Russian Market Potential for Iranian Poultry

Huge Russian Market Potential for Iranian Poultry  Huge Russian Market Potential for Iranian Poultry

In perhaps one of the harshest anti-western decrees issued by Russian President Vladimir Putin, hundreds of thousands of food products that were said to have violated Kremlin’s ban on European food imports have been destroyed.

Moscow’s intensified standoff with the West over the Ukraine crisis followed by sanctions imposed by the European Union on the Russian economy last year paved the way for Russia to decide to shift imports to East Asian countries and political allies such as Iran, Fars New Agency reported.

This comes against a backdrop of booming agricultural production in Iran in recent years.

In producing chicken, for instance, Iran has managed to transform from an importer of chicken to a major exporter. Iran’s chicken exports saw a jump from $4 million in 2012 to $86 million in the last Iranian year (ended March 20, 2015). The product has been the main commodity exported to neighboring countries. Over $80 million worth of chicken were exported to Iraq alone last year.

Last week, Iran’s deputy minister of agricultural jihad for livestock affairs, Hassan Rokni, announced that the veterinary organizations of Iran and Russia have agreed about the safety of Iranian chicken and that traders can start chicken exports to Russia now.

Russia’s annual chicken import stands at $160 million, most of which is imported from Belarus. This is while a comparison between the prices of chicken exported from Belarus ($2.2 per kilo) and that of Iran ($2 per kilo) shows Iran could use the price difference to surpass its main rival in chicken exports to Russia.

Taking over the Russian chicken market, experts believe, could not only increase exports and generate revenues, it would also increase the profit margin for domestic farmers. Since overhead costs remain constant regardless of the output, the more chicken farmers produce, the lower production costs will be.

While the chicken farming industry works at below 40% capacity, the Russian market, according to many experts, could help give the sector a boost on the one hand and portray a more promising future in international agricultural trade on the other.