New Food market report from Business Monitor International: "Iran Agribusiness Report Q1 2013"
Boston, MA -- (SBWIRE) -- 01/02/2013 -- Financial sanctions imposed to pressure Tehran over its nuclear programme are playing havoc with Iran's ability to import goods. Food price inflation is picking up, leading to a serious decrease in meat consumption. The replacement of regular trade for barter can be seen as a feasible, albeit temporary, way of circumventing sanctions to meet demand. Over the longer term, we believe that the continued investment by the government to improve infrastructure - such as the improvement of irrigation systems - will help the country to turn away from its backward agrarian system and will yield results in terms of better-quality grains.
- Rice production growth to 2016/17: 14.8% to 1.8mn tonnes. This reflects expectations for demand growth and efforts to increase self-sufficiency in light of sanctions.
- Milk consumption growth to 2016/17: 18.3% to 3.5mn tonnes. Milk demand will be supported by government initiatives to boost consumption, as well as by population growth.
- Sugar production growth to 2016/17: 40.5% to 1.3mn tonnes. This high growth is due to base effects. Production will be boosted by domestic consumption. However, although Iran is instituting plans to increase production out to 2020, we have not yet seen significant progress.
- 2013 real GDP growth: -0.8% (compared with -3.1% in 2012; predicted to average 1.0% from 2012-2017).
- 2013 consumer price inflation: 45.0% year-on-year (y-o-y) (up from 21.6% y-o-y in 2012; predicted to average 28.6% from 2012-2017).
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Financial sanctions imposed by the US and EU to pressure Tehran over its nuclear programme are playing havoc with Iran's ability to import goods, including food. Food and consumer items are not targeted by sanctions, but the sanctions make deals and payments between traders difficult. Iran defaulted on payments for rice from India, its top supplier, in 2012. As a result, some exporters to Iran have stopped selling rice to the country with the customary 90 days credit for payment. Even payments considered more secure, via agents in the UAE, are being affected due to currency fluctuations. That said, we believe Iran's imports will be relatively unaffected in 2013, as the country is diversifying its providers, with Argentina exporting to Iran again after a 20-year break.
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