STRATEGY ▶▶▶
well. In order to avoid any consumer price hikes, the govern- ment has set upper thresholds for both chicken meat and eggs on the domestic market. “The current price of ready-to- cook chicken in Iran has increased only by 14.1% relative to 2002. The average price of eggs has risen by 16% compared to the same year and, given the investments and risks that the industry has to bear, producers are not satisfied with this at all,” Dr Majid Movafegh Ghadirly notes. On top of this the government does not allow poultry companies to export. “Unfortunately, chicken meat has always been a political commodity in Iran and although we have an annual surplus of more than 200,000 tonnes, the government is not interest- ed in sustained export under the existing
sanctions.Therefore, it only allows short-term exports to support producers,” he adds.
Export an attractive option If export were allowed on a sustained basis, this could give a real break to Iran’s poultry industry. During the past few years Iran has been exporting poultry to Iraq, Afghanistan and some CIS countries, with overall poultry imports of around 3 million tonnes per year. “We know that the price of ready-to-cook chicken on the domestic markets of Iran’s competing countries is twice that of their export price. But by granting export bonuses and subsidies, governments can offset the difference in revenue from exports and domestic profits. As the saying goes – politics help the economy – but that is not the case in our country,” says Dr Majid Movafegh Ghadirly.
Sanctions inhibit improvements “Iran’s poultry industry has always been one of the leading in- dustries in the national economy and has always strived to keep up with the world’s scientific and technological stand- ards. But we do see that, due to the sanctions, the process of improving productivity and reducing costs has slowed down,” Dr Majid Movafegh Ghadirly continues. When it comes to pro- ductivity, local farmers currently put a lot of effort into lower- ing the mortality rate, improving the feed conversion rate (FCR) and optimising the length of the grow out period and end weight. The average weight at the end of the flock in Iran is 2.6 kg while in the US it is 2.8 kg. Also the average growing period is 48 days while in the US it is 47 days. The FCR in Iran is 1.9 while in the US it is 1.8. Losses in Iran are 10%, while in the US they amount to only half of that. While continuously improving, Iran still lags behind the US in terms of productivi- ty in the poultry industry.
What does the future hold? It is hard to make any future forecasts given the uncertainty in the global economy caused by the COVID-19 pandemic. Poultry farmers in Iran have put forward a package of changes they would like to implement over the coming years
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in order to make the industry more productive and competi- tive. “In developing the Iranian poultry industry the govern- ment has two major objectives: to reform the poultry busi- ness environment and to increase the share of large-scale poultry production,” explains Dr Majid Movafegh Ghadirly. The first objective envisages shifting to growing lighter broil- ers and increasing the production of turkey, quail and other alternative poultry species. The second objective is to support the existing trend of building industrial poultry farms. “The share of industrial poultry farms was 15% three years ago, and we expect this figure to rise to 45% in the next two years,” notes Dr Majid Movafegh Ghadirly.
COVID-19 brings a lot of uncertainty As in many countries Iran’s poultry supply chain was severely disrupted by COVID-19, especially as the country was hard hit by the virus. “Because people opted to stay at home and not leave their houses due to COVID-19, we have seen an increase in demand for poultry products. However, this has been off- set by the effects of business closures, food service, catering, restaurant and fast food closures, as well as the lack of travel and entertainment. As a consequence, the price of live poultry on the market has fallen strongly,” he adds. Against this background, the govern- ment has announced that it will buy chicken at a guaranteed price to prevent losses to poultry farmers. This has made the government both a friend and a foe to the Iranian poultry sector.
Due to feed shortages the demand for day- old chicks plum- meted. Some were even destroyed.
PHOTO: VLADISLAV VOROTNIKOV
PHOTO: VLADISLAV VOROTNIKOV
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