Iran: Russian poultry imports may worsen oversupply

Currently, Iranian poultry farmers battle an oversupply crisis owing to a slump in domestic consumption following a controversial industry reform embarked on by the government at the end of 2022. The market experienced an oversupply of between 500 and 1,000 tonnes of chicken meat recently, the publication said, citing the official data from the Ministry of Agricultural Jihad.

Konstantin Korneev, executive director of the Russian consulting firm Rincon Management, was quoted by Eghtesad Online as saying that currently, “almost all Russian chicken exporters are negotiating to enter the Iranian market”.

Habib Asadollahnejad, the CEO of the National Union of poultry meat farmers, told the publication that admitting new foreign firms to the poultry market where a supply surplus had already incurred losses to Iranian farmers was unjustified, adding that the authorities must explain the rationale behind this step.

A last blow for a troubled industry

In light of this, allowing Russian poultry imports could become a last blow for the troubled Iranian industry, the publication said, citing market players.

The very fact that Iran keeps importing frozen chicken while the market is going through oversupply has been sharply criticised by local farmers, Eghtesad Online said, adding that some market players that imported large quantities of frozen broiler meat last year rushed to sell them in recent months, before the end of the shelf life, which put even bigger pressure on the market.

The national union of poultry meat farmers said that due to severe mistakes in regulating the domestic poultry market by the government, the Iranian poultry industry suffers losses of 150 billion tomans a day (US$350,000).

Strengthening food security

On the other hand, the Iranian government’s motivation to start importing poultry meat from Russia is likely associated with a need to straighten the country’s food security, Eghtesad Online, citing local market analysts.

“The government is aware of the results of its wrong policies in the field of chicken production in the past few months and knows that a slump in output and price hikes are inevitable due to the heavy losses the farmers have to suffer,” the publication said, adding that the Russian poultry meat could compensate for a drop in domestic production.

In general, Russian poultry is expected to be highly competitive in the Iranian market in the first place thanks to access to cheaper feed. Iran is estimated to import 70-80% of feed grain, the price of which skyrocketed during the past year.