Industry Trend Analysis - Iran - Opportunities In Inputs For Global Agri Majors - SEPT 2017

BMI View: Iran ' s growing deficits in the agribusiness sector hold opportunities for global agribusiness companies over the coming 5 years . The best opportunities will be in the sale of inputs and equipment, as opposed to FDI into the sector or the export of food stuff. T he strong appetite for modernization among Iranian agribusinesses , together with the government goal of boosting domestic production , will facilitate foreign players ' market entry into the segment.

Iran runs deficits in most agri-food products, and we forecast these deficits to deepen over the coming five years as demand increases but production growth struggles to keep pace. The government is eager to boost domestic production through the use of high-tech inputs, which is where we believe the bright spot will be for foreign market entrants.

There is a significant discrepancy between agricultural practices in Iran and international best practice, which has caused the country to underperform in yields. According to the USDA, Turkey has posted yields that were on average 10% higher than those of its neighbour in the period 2007-2015, despite Iran's much higher irrigation coverage. Turkey's rice yields have also been almost 70% higher than Iran's. These differences can be explained by differences in input use, itself a result of international sanctions.

Iran Deficits To Bring Commercial Opportunities
Iran - Selected Agricultural Commodities, Production Balance ('000 tonnes)
Source: BMI

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