New Market Research Report: Iran Agribusiness Report Q3 2016

From: Fast Market Research, Inc.
Published: Tue Jun 14 2016

The removal of almost all sanctions on Iran's economy herald s a new era for the country. In terms of agriculture, the return of economic growth will have the most rapid and direct impact on consumption. Production and investment in the supply chain will also benefit, but over the longer term. Therefore, production expansion will be slower than consumption growth in the coming years and Iran will remain a large and growing importer of key commodities. The lifting of sanctions will also lead to a normalisation of trade flows, which will encompass a rise in imports and the re-diversification of suppliers.

Key Forecasts

Wheat production growth to 2019/20: 21.0% to 16.0mn tonnes. Wheat yields are expected to improve owing to the modernisation of technology, including hardier grains variants, greater access to relevant inputs and a larger area of the country benefiting from new irrigation facilities.

Full Report Details at

Sugar consumption growth to 2020: 27.6% to 3.1mn tonnes. Sugar demand will be mainly driven by population growth and the improved macroeconomic conditions following the lifting of sanctions in 2016.

Poultry production growth to 2019/20: 15.2% to 957,000 tonnes. Growth will be driven by domestic demand and the effects of increased investment.

BMI universe agribusiness market value: USD64.03bn in 2016 (up 3.6% compared with 2015, growth forecast to average 3.6% annually between 2016 and 2020).

2016 real GDP growth: 3.8% (up from 0.4% in 2015; predicted to average 4.6% from 2016 to 2020).

2016 consumer price inflation: 11.0% y-o-y (down from 15.0% in 2015; predicted to average 11.4% y-o-y from 2016 to 2020).

Key Developments

The immediate removal of almost all sanctions on Iran's economy in January will herald a new era for the country and see a significant uptick in economic growth. Crucially, Iran will be reintegrated into international financial transaction systems and benefit from improved access to funding. The country will also see a gradual return of private investment. Iran has huge potential across almost all sectors, and agricultural consumption and production is no exception. Therefore, we believe the lifting of the sanctions will have a significant impact on the industry.

Over the next two-to-three years, the pickup in economic growth, easing of inflation and easier access to international products will lead to acceleration in food consumption. It will have a rapid positive impact on consumer confidence and on purchasing power. Iran's consumer base is attractive, characterised by a scalable and young population, high urbanisation, strong taste for Western products and widespread access to financial services. Agricultural and food products consumption per capita is also low by regional standards, suggesting room to grow, especially regarding sugar, corn, meat and vegetable oils, including palm oil.

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