In past years Iran had been a large importer of sheep meat but economic problems and sanctions effectively meant that imports largely ceased.
Is it possible that this could change following sanctions that have now been effectively lifted, which followed the decision of January 16 2016 that the country has now met its internationally agreed nuclear requirements? In contrast to sheep meat, imports of beef and veal have been more substantial in recent years already, with trade having built up again since the early 2000s.
Iran is the second largest consumer market in the Middle East and North Africa, after Egypt, with around 80 million consumers. Currently, economic growth has stalled but the International Monetary Fund (IMF) is expecting it to pick up in 2016/17, projected at 4-5.5 per cent. This is given increased oil revenues with the lifting of export restrictions although the level of oil prices will also impact on the rate of economic recovery. Inward investment is also already building up for example in the local manufacture of vehicles. The long-term economic prospects look even more positive given Iran’s huge oil and gas reserves and their low extraction costs.
The lifting of economic sanctions is expected to result in Western goods reappearing on shelves. Foreign investment in the modern retail sector is already in the pipeline and investment in the food service sector is also anticipated. The Economist Intelligence Unit has just published a report on Iran “All that Glitters. Assessing opportunities and risks in post-sanctions Iran”
In the early 1980s sheep meat imports by Iran amounted to over 100,000 tonnes per annum and peaked at as much as 162,000 tonnes in 1982. This made it the second largest global importer after the United Kingdom. Trade was dominated by New Zealand and over this period Iran was its second largest market after the United Kingdom. Product mainly consisted of lamb. The other significant supplier was Australia, mainly supplying mutton. By the 2000s there were no imports, followed by some small resumption of trade in the 2010 to 2013 period mainly supplied by Australia. This trade though fell away again in 2014 and 2015, based on Australian export data. The last year of shipments from New Zealand was 1998. However, statistics for Iran should be treated with some caution as the country did not submit official trade figures in some years and so estimates, based on data for exporting countries, were made by FAO.
Beef and veal imports by Iran have also shown considerable year to year variations, but unlike sheep meat there has always been some significant trade. In recent years imports have been much higher than for sheep meat. Brazil now dominates trade and its data for 2015 shows shipments of 98,000 tonnes to Iran, although this was well down on the 191,000 tonnes supplied in 2010. In addition 40,000 tonnes, were also imported from the United Arab Emirates which will have been re-exported. The data also shows that there were even significant shipments from the EU, of 27,000 tonnes in 2011, but EU export figures indicate that trade has been negligible. In recent years it has been below 1,000 tonnes per annum. The EU though had been a small but significant supplier in the early 1980s.
Government policy could impact on future levels of red meat imports. This includes increased push for food security including in red meat and prevalence of bureaucracy. Import tariff policy could also impact and Iran is not a member of the World Trade Organisation. Also Iran has seen a large growth in poultry meat consumption, unlike red meat, in order to meet the increase in demand for animal protein. There is also a need for an improvement in food distribution infrastructure.
The question is whether Iran could again return as a major importer of sheep meat and so offer renewed market opportunities for Australia and New Zealand in particular. Such developments would help in further export diversification for these two countries, just as China has already done, and reduce their dependence upon traditional markets. In the case of beef the Iranian market has already offered good market opportunities for Brazil, other supplying countries could gain some benefit as well.