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Recently Released Market Study: Iran Agribusiness Report Q4 2012

New Food market report from Business Monitor International: "Iran Agribusiness Report Q4 2012"


Boston, MA -- (SBWIRE) -- 11/08/2012 -- BMI View: Despite tight sanctions on imports of goods including agriculture, we believe Iran is still relatively sufficiently stocked to avert any significant food shortage in the near future. At the same time, the replacement of regular trade for barter can be seen as a feasible, albeit temporary, way of circumventing sanctions to meet all demand. Over the longer term, we believe that the continued investment by the government to improve infrastructure - such as implementing pressurised irrigation networks and correcting irrigation methods - will yield longer-term results in terms of better-quality grains, including rice.

Key Forecasts

- Rice consumption growth to 2015/16: 8.8% to 3.5mn tonnes in 2016. Over the longer term, we believe that steadily rising disposable incomes will lead to consumers trading up from corn and particularly from wheat-and-vegetable-based dishes to more meat-and-rice-based meals.

- Beef consumption growth to 2015/16: 9.8% to 664,300 tonnes. We have revised down our forecast owing to our expectations for a slump in demand as sanctions exert a squeeze on availability and incomes.

- Milk consumption growth to 2015/16: 17.4% to 3.4mn tonnes. Per capita consumption is forecast to rise by a smaller 11.7%, suggesting that population growth surpasses consumption growth per capita.

- 2012 real GDP growth: -1.2% (compared with growth of 0.7% in 2011; predicted to average 1.05% from 2011-2016).

- Consumer price inflation: 20.4% year-on-year (y-o-y) in 2012 (up from 24.5% y-o-y in 2011; predicted to average 20.4% from 2011-2016).

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Industry Developments

Iran's largest rice supplier, KRBL Limited, which is also the largest Indian exporter of basmati rice, is reportedly looking to East and West Africa for new markets in the wake of falling global rice prices and export restrictions to Iran, the largest buyer of Basmati rice. LT Foods, which exports to Iran and is another major Indian rice exporter, is also allegedly sourcing for new markets to sell to. That said, any fall in supply of rice from India is not expected to make a significant dent in the country's imports of the grain, as Argentina has started to step in to fill the shortage. After a 20-year break from exporting rice to Iran, the country is set to export 14,000 tonnes in its first shipment and 16,000 tonnes in October 2012. Moreover, the US Department of Agriculture forecasts imports of rice to remain stable at 1.9mn tonnes for 2012.

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