The Ministry of Industries, Mining and Trade's review of the last Iranian year (March 2020-21) shows the output of 19 industrial products (out of 29 under review) registered growth during the 12-month period compared with the year before.
A total of 5,060 tons of acrylic fibers were produced during the period, up by 196% compared to the previous year’s figures, marking the highest growth among the commodities under review.
Truck and mini-truck production stood at 6,415, showing a 54.1% year-on-year rise.
The production of washing machines rose by 51.8% to exceed 1.12 million machines.
A total of 649 combine harvesters were produced during the period under review, indicating a 44.5% YOY rise.
Television production stood at 1.26 sets to register a year-on-year increase of around 42.6%.
The output of refrigerators and freezers went up by 32.2% to surpass 2.09 million sets.
More than 278,200 tons of auto tires were produced over the 12 months, indicating a 20% YOY growth.
Production of passenger vehicles reached 903,900, up by 19.1% YOY.
Different types of synthetic fiber production rose by 17.2% YOY to stand at around 279,400 tons while carbon black production amounted to 141,400 tons, showing a YOY increase of 16.8%.
Around 21,666 tractors were manufactured over the period, indicating a 15.9% rise compared with the year before.
Particle board production reached 791,800 cubic meters, up 10.7% YOY.
Production of petrochemical totaled 60.7 million tons, up by 8.9% compared with the year before.
Production of cardboard stood at 573,300 tons, up 7.5% YOY; cigarettes were over 58.7 billion, up 7.1% YOY; refined industrial and motor oil at 668,700 tons up 6.4% YOY; fibers at 1.6 million cubic meters, up 4.4% YOY; shoes and other kinds of footwear reached 143 million pairs, up 2.3% YOY and human medicines hit 49.4 billion items, up 1.2% YOY.
Ten out of the 29 products under study saw a decrease during March 2020-21, compared with the year before.
Vegetable oil production saw a 12.4% YOY decline to reach 1.57 million tons – the sharpest decline among the commodities under review.
The production of pesticides and insecticides stood at 33,200 tons, down 11.7% YOY; leather at 43.7 million square feet, down 10.8% YOY; electric motors at 8.49 million devices, down 9.3% YOY; buses, minibuses and vans at 1,873 vehicles, down 7.8% YOY; polyester sewing thread at 274,100 tons, down 7.5% YOY; evaporative coolers topped 1.23 million devices, down 5.9% YOY; detergent powder at 634,400 tons, down 2.6% YOY; polyester fibers at 237,300 tons, down 1.1% YOY and different types of paper exceeded 1.02 million tons, down 0.9% YOY.
Turmoil in Vegetable Oil Market
The vegetable oil market in Iran has been in turmoil, as the country relies mostly on imports for its raw materials. Nonetheless, the government has focused on meeting the domestic need for the staple foodstuff in recent months.
“Iran produced 215,000 tons of vegetable oils and fats during the month ending March 20, indicating a 24% increase year-on-year,” says Yazdan Seif, managing director of Government Trading Corporation of Iran.
“Production stood at 196,000 tons in the month ending Feb. 18 compared with 185,000 tons of the year before. During the month ending Jan. 19, the country produced 177,000 tons compared with 154,000 tons of the same month of the year before,” he was quoted as saying by IRNA.
Noting that Iran’s 93% dependency on raw material imports is the main challenge in the way of vegetable oil supply, the official said, “The first half of the last Iranian year [March 20-Sept. 21, 2020] was the toughest time in the history of sanctions against Iran; it coincided with the outbreak of Covid-19 and problems related to the provision of foreign currency. However, we managed to resolve those problems by tapping into our strategic reserves.”
Seif noted that at present, 650,000 tons of vegetable oil are available at ports’ warehouses and edible oil factories, which are sufficient for meeting four months’ demand.
“Monthly consumption of edible oils and fats stands at 150,000 tons,” he said.
Government Trading Corporation of Iran provided vegetable oil factories with a total of 2.07 million tons of unprocessed oil, including 1.97 million tons from strategic reserves, subsidized imports at the rate of 42,000 rials per US dollar by private sector, extraction from imported and domestically-produced oilseeds, plus more than 100,000 tons available before the start of the accounting period in the year ending March 2021.
Moreover, vegetable oil factories were supplied with 260,000 tons of raw vegetable oil since the start of the current Iranian year (March 21) to April 14, ILNA reported.
This is while the Ministry of Industries, Mining and Trade's review of the first 11 months of last Iranian year (March 20, 2020-Feb. 18, 2021) shows domestic production of vegetable oil saw the biggest decline (16.2% YOY) among 29 products under the ministry’s review to reach 1.38 million tons.
Outbound Oil Smuggling
Outbound smuggling via eastern and western borders is to blame for the increase in the prices of cooking oil, Qasemali Hassani, the secretary of Foodstuff Wholesalers Union, said earlier in 2021.
“Sadly, the government is in charge of the production of cooking oil from the beginning till the end, including the allocation of foreign currency to supply of raw materials to pricing and distribution. The private sector plays no role in this matter,” he was quoted as saying by IRIB News.
Hassani added that prices are set by the government and the cooking oil with those prices were only distributed at chain stores whereas only 25% of people have access to chain stores.
He called on the officials to dismiss mandatory pricing and instead pay the cooking oil subsidy, which is 10 million rials ($40) per head annually directly to the people.
Given the rise in global prices of unprocessed edible oils and other costs, consumer prices of products packaged in PET containers will increase by 10% and those packaged in other types of containers by 13% as per the recent decision of Market Regulation Headquarters.
Referring to the monthly consumption of 100,000 tons of unprocessed oils in Iran, Abbas Qobadi, a senior official with the Ministry of Industries, Mining and Trade, said, “To calm the turbulent market of edible oil, we’ve decided to increase both imports and production of solid fats and step up the distribution of this essential product.”
“The reliance of imports of raw materials, high costs of machinery and their maintenance, and corrupt practices stemming from the government’s allocation of cheap foreign currency are three main challenges of vegetable oil production industry,” Abolhassan Khalili, the head of vegetable oil industries’ association, says.
“Imports meet 90% of demand for unprocessed oil and oilseeds. That makes it all the more important to pursue development plans regarding expansion of oilseed cultivation areas more vigorously under the current conditions,” he said.
Khalili noted that manufacturers of production machinery are based in Europe so it became increasingly difficult and costly for producers to purchase and import spare parts under sanctions.
He referred to the allocation of subsidized foreign currency at the rate of 42,000 rials per US dollar to import unprocessed vegetable oils by the government and said, “The policy gives rise to higher risk of corruption in imports and production; the government needs to work out an alternative way to support low-income households.”
Industrial PMI Ends Fiscal 2020-21 Above Threshold
The Purchasing Managers’ Index for industries during the 12th month of last fiscal year (Feb. 19-March 20) settled at 57.29 from 58.34 in the preceding month (Jan. 20-Feb. 18), indicating a 1.05-point or a 1.8% decrease.
The announcement was made by the Statistics and Economic Analysis Center of Iran Chamber of Commerce, Industries, Mines and Agriculture. The center is measuring PMI, known by its Farsi acronym Shamekh, in Iran for the past 30 months.
PMI is an indicator of economic health for manufacturing and services sectors. It provides information about current business conditions to companies’ decision-makers, analysts and purchasing managers.
The headline PMI is a number from 0 to 100. A PMI above 50 represents an expansion when compared with the previous month. A PMI reading under 50 represents a contraction while a reading at 50 indicates no change. The further away from 50, the greater the level of change.
PMI is based on a monthly survey sent to senior executives of more than 400 companies. It is based on five major survey areas: new orders (30%), raw material inventory (10%), production (25%), supplier deliveries (15%) and employment (20%).
The survey poses 12 questions about business conditions and any changes, whether it is improving, no changes or deteriorating.
Rubber and plastics industries posted the highest PMI with a reading of 62.92 while non-metal mineral industries registered the lowest PMI reading with 51.25.
