Iran: Reduction in subsided feed prompts poultry price hike

Poultry meat prices at record high

The poultry price reached more than 40,000 tomans per kg (€0.80) in the second half 2020, state-owned publication Mashreq News has recently reported. This is believed to be the highest rate ever seen.

Govt distributes animal feed reserves

The government was finally able to control the price, to some extent, by widely distributing strategic reserves of animal feed, the publication said. Thus, the poultry price fell below 35,000 tomans (€0.07) per kg at the end of March, but still, this figure is far above the pre-crisis rate. The authorities are concerned that poultry meat has become less affordable for the country’s population.

Less access to subsided feed

The government blames the industry organisation and small business owners for the price hike, said Gholamreza Hassanpour, head of the trade union Basij. However, the prices are rising since some farmers reportedly might have lost access to the subsidised feed supplies over the past several months.

Farmers culling poultry population

Since the beginning of the pandemic, the Iranian government has been distributing feed among farmers at a price significantly lower than that on the open market. However, there are signs that in 2021 these supplies narrowed, prompting farmers to cull a part of their poultry population.

According to the National Poultry Farmers Union, the number of chicks in the country at the end of 2020 was around 95 million. It is believed that at least 110 million are needed to meet the domestic demand fully.

Reason for decline in subsided feed unclear

The feed shortage is believed to be the main factor behind the skyrocketing price on the domestic broiler meat market, although the reasons for the decline in subsidised feed supply are not fully clear.

Besides, some reports have suggested that chicken meat is being smuggled from Iran to neighbouring countries, primarily Iraq, where a difference in exchange price has led to a growing demand for food products from Iran during the past year.

Increase in poultry imports

In March of 2021, Iran issued an emergency decree approving the import of up to 50,000 metric tons of chicken meat from Turkey and Brazil.

The government plans to allow importers to purchase poultry meat using exchange at a subsidised price of 42,000 for a US dollar against the Iranian rial. This rate is only used for imports of a handful of essential goods. It is much lower than a market price of 247,500 for the rial against the dollar.