Iranian traders will not be allowed to use preferential exchange rates for importing butter and frozen chicken, as per a new regulation passed by the Trade Promotion Organization of Iran, affiliated with the Ministry of Industries, Mining and Trade. Multiple foreign exchange rates are at work in Iran, meaning the central bank offers a rate at a discount compared to the open market rate for “essential” imports and exports, and current account transactions. Other than that, there is the unofficial (market) rate, which is set higher than the official one. The new regulation will reduce the profit margin for importers of chicken and butter whose global prices have recently declined, among many other food and consumer products. “Butter, like many other foodstuffs, has experienced a fall in prices in global markets, while in Iran, the price has remained intact,” Mohammad Reza Mollasalehi, an official with the Ministry of Agriculture, was quoted as saying by ISNA. “Butter importers earn big with profit margins exceeding 75%,” he added. Some 40,000 tons of butter were imported during the last fiscal year (March 2015-16), according to Mollasalehi, in spite of huge surplus in the domestic dairy sector. TPOI’s Import and Export Regulation Office is in charge of revising the list of commodities entitled to preferential exchange rates. The body earlier excluded steel and some materials used in textile manufacturing from the list of recipients of lower rates, as a non-tariff policy to keep imports in check and support domestic manufacturing.
