February 8 2014, 09:11 Source: APK-Inform Views: 5833

Fat-and-oil sector of Iran - white hope for imports

On January 20, 2014, the conference Palm Oil Trade Fair and Seminar (POTS) was held in Tehran, capital city of the Islamic Republic of Iran, as one of the series of conference events held in the region by Malaysian Palm Oil Council (MPOC). Iranian Vegetable Oil Industry Association (IVOIA) is the co-organizer of the conference. The Association is the long-standing partner of APK-Inform Agency, which supported to large Iranian delegation to visit our conference in Istanbul in October 2013. We were pleased to receive an invitation from the Iranian party to take part in the reporting event. The event is focused on the theme of palm oil, and became the meeting place for members of the fat-and-oil market of Iran (over 400 delegates), and was actually devoted to the further prospects of development of the reporting sector of the Iranian economy in terms of the new economic conditions. In addition to Iranians, the official delegation from Malaysia took part in the conference (including the management of MPOB and the Minister of Plantation Industries and Commodities), as well as representatives from Ukraine, Tajikistan, Pakistan, Singapore and Germany. It is worth noting the high level of organization of the event, the venue of the conference made it even more official (the state-owned media-center), and awesome Persian hospitality showed up in the rich entertainment program.

Thomas Mielke became the keynote speaker of POTS 2014 - international star of the fat-and-oils market analysis, which needs no introduction. Thomas was at his best, he vividly and emotionally presented the prospects of development of the world market of vegetable oils in the coming months. In addition, he provided rather interesting estimation of the prospects of the Iranian market, and some tips to Iranian oilseed processors. In particular, T.Mielke noted that Iranian oilseed processors should pay attention to Ukrainian rapeseed, in order to increase loading of their processing capacities. We should note that only in the season-2013/14 Ukraine exported rapeseed to Iran (no supplies in 2011/12 and 2012/13 MY), while in October 2013 Iran imported 2.768 thsd tonnes of Ukrainian rapeseed. As for vegetable oils, T.Mielke noted the high dependence of Iran on the imports, and focused attention of the audience on the forecast of price development on the world market of palm and soybean oils in the coming months. According to the expert, the Chinese demand remains the main driver of prices in the reporting segments of vegetable oils market. At the same time, the logistical difficulties in South America provide additional support to the soybean sector. According to the forecast of T.Mielke, in 2013/14 MY Iran will import 250 thsd tonnes of sunflower oil (against 180 thsd tonnes in 2012/13 MY). The Black Sea countries will be the main suppliers of the commodities.

Communication with the conference participants on the sidelines was also very informative: there is rather high interest in purchasing of Russian and Ukrainian sunflower oil, the demand for such oil on the domestic market continues growing, and therefore more and more producers of bottled oil prefer dealing with sunflower oil. In the structure of domestic consumption its share continues steadily increasing, the commodity is well-positioned in the line of premium vegetable oils following olive and sesame oils, it has a pleasant taste for local consumers and, most importantly, does not have “GMO traces” (such as soybean oil).

After ending of the event representatives of APK-Inform Agency held meetings and negotiations with the leadership of IVOIA. Items of the agenda: cooperation in 2014, information exchange, strengthening of trade relations between the Black Sea countries and Iran, and the opportunity of holding of the joint conference in Iran in 2014 as the key instrument of such cooperation.

However, not only the fat-and-oil market of Iran is interested in supplies of imported agricultural products. According to Kaveh Zargaran, Secretary General at Iran Food Confederation (the association of flour millers, traders, oilseed processors, etc.), Iran is quite interested in strengthening of the entire spectrum of agricultural commodities trade with Ukraine and Russia, including grains, forages, oilseeds, oils and other types of agricultural products.

As a reminder, Iran is one of the major buyers of agricultural products from the Black Sea region. Thus, in 2012/13 MY the share of Iran covered 7% of the general Russian exports of wheat and 7% of the Ukrainian exports of maize. As for sunflower oil, in 2012/13 MY Ukraine exported more than 160 thsd tonnes of the commodity to the country, in 2011/12 MY the index totaled 235 thsd tonnes. During several recent years, exporters from the Black Sea countries show a steady interest in increasing of the veg oil supplies to Iran, but financial limitations and complexity of payment realization to the country constrained many market players. But breaking of financial sanctions against Tehran inspires optimism to the market participants, because in case of simplification of the financial procedures, the capacious Iranian market will become "new Egypt" for agricultural products from the Black Sea region.


Svetlana Sinkovskaya


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