Iran tomato market production, consumption and trade

By: Mohammad Ashkwari
July 2014
Tomato production 

In Iran tomatoes can be grown in open fields all the year round from north to south of the country thanks to the range of climate. In the winter some Northern cities have a temperatures between -5°C (in day time) to -20°C (at night) whereas at the same time in south of Iran the temperature is between +8 to +30.

The winter crop in southern Iran is not suitable to produce paste and peeled tomatoes because of its poor color, so all are consumed fresh, but summer crops benefit from ideal climate for tomato cultivation. Full sunshine for the right number of days, and suitable differences between daytime temperature and night-time temperature produce tomatoes that are good in color, which results in good color quality paste.

Tomatoes are cultivated in many parts of Iran, briefly, in 3 main parts:

The first area is in the south province in which all of the products are consumed fresh, the cultivating area is 33,000 hectare and the total product is 1,350,000 metric tons which is about 20% of the total tomato production in the country. Planting date is during October and harvesting date starts from end of December.
The second area is in the central province in which 95% of the products are consumed fresh too, the cultivated area is 36,000 hectare and the total product is 1,250,000 tons which is about 20% of the total tomato production in the country. Planting date is end of December and harvesting date starts from beginning of March.
The third area is from central parts to Northern provinces in which tomato cultivation is during paste production season. The cultivating area is 100,000 hectare and the total volume of tomatoes produced is 3,900,000 metric tons and is about 61% of total production in the country. About 60% of the total volume tomatoes produced in this area is consumed in fresh market and 50% are processed.

Planting starts from beginning of March to mid of April and harvest date starts from middle of June to the end of October in different zones.
Tomatoes are mainly grown on small farms (2-5 hectares) employing family labor. The main varieties grown for tomato paste production are open pollinated seeds and only 10% of seeds are hybrid.

Harvesting is carried out manually, with up to 3 pickings per field.
Water is not plentiful but was not expensive in relation to other factors in previous years, and the farms were irrigated by furrows, but recently, subsidy payment for energy carriers stopped, so the farmers are tending to benefit drip irrigation system as soon as possible. In recent years only 2% of farms have been equipped with drip irrigation system.

Average tomato yield on drip irrigation are 60 metric tons per hectare compare with 37 metric tons with furrow irrigation farms.
Among the 80 tomato processing factories, 12 factories are equipped with modern and high performance technology, and their processing capacity is 60% of the total processed tomatoes crop.

The market for tomato products in Iran

In year 2013 the total volume of the fresh tomato produced was 6,611,000 tons which has experienced a 9% annual growth since 2011 on average.
Tomato is mainly consumed in three ways:
1. Fresh tomato
2. Tomato paste in cans which are used in home food cooking directly
3. Ketchup and tomato based sauces and ready meal

Due to the high share of tomato consumption in Iranian food, this country has turned into one of the biggest consumer in the world. Considering country`s good condition for tomato production and processing, Iran`s factories could meet the local demand and also the need for export. Because of high custom tariffs and proper production conditions, importing of tomato products has not been considerable.

Fresh tomato

Considering Iran’s climate as mentioned above fresh tomato is accessible throughout the year. Thus, the main need of people for tomato has met by fresh type.
In year 2013, fresh tomato consumption volume was 4,463,000 tons which has accounted for about 67% of total produced fresh tomato and an increase of almost 13% on average over the past three years. Per capita consumption had indeed sharply increased to 57.68 kg in 2013 (16% growth in comparison to 2012).

Fresh tomato exported equivalent to 248,000 tons in year 2013 which have accounted for about 4% of total volume of produced fresh tomato and rose by 14% annually over the past three years.

The total value of the fresh tomato exported amounted to USD 86.5 million in 2013. The main markets for fresh tomato export were respectively: Iraq, Afghanistan, Russia, United Arab Emirates and Azerbaijan. The revenue generated by export to Iraq alone was amounted to USD 74.8 million which is more than 86% of total fresh tomato export revenue.

Processed tomato

In year 2013, about 1,900,000 tons of fresh tomato was used for tomato processed products which accounted for 29% of total tomato supply.
The total tomato volume for processed tomato is slightly increased by 1% on average over the past three years.
The proportion of processed tomato used to meet internal demand was 73% (1,395,500 tons).
Per capita of tomato through finished products consumption was 18.0 kg in 2013 which has experienced an increase of 6% in comparison with the year before.
In year 2013, a considerable share of tomato processed products in internal market (88%) was for tomato paste packed in 850 gr cans with the 28 Brix includes 2% salt. Adding taste and color to Iranian foods is the main reason of using canned tomato paste. The other 12% is intended for ketchup and tomato based sauces and ready meal from which the share of ready meal is only about 2%.

The factory gate price of each tons of fresh tomatoes was 148 USD which experienced 6% annually increase on average over the past three years. In spite of the fact that the price in local currency was noticeably increased by 109% annually on average considering; inflation, raw material shortage, and especially sharp decline of the local currency exchange rate. The market price for 850 gr canned tomato paste was 1.50 USD for last year production.

In year 2013, the volume of exported tomato paste was 110,000 tons which was about 27% of total processed tomato, which canned tomato paste absorbs 99,000 tons (90%), and the remained 10% (11,000 tons) exported in 220 lit aseptic bags which were mainly exported to Russia. The exported volume of processed tomato has experienced 6% growth annually on average over the past three years.

Iraq market is a major focus for the Iran industry, as it absorbs an increasingly large share of the Iranian production (73,700 tons). Afghanistan (23,100 tons) was in the second place. Russia and Turkmenistan each has had 6% and 2.6% share of the total exported volume were in the next places. 

The total value of processed products exported amounted to USD 176 million in 2013 with annual growth of 6% on average.
Iraq with 64% proportion of total export value (USD 112 million) generated the greatest revenue. In recent years, the fluctuations in value and volume of tomato products export was due to the changes in Iran's foreign policies, and sanctions which has led to exchange rate fluctuations. 

Outlook for tomato market

In national market, considering the stabilized population rate and per capita consumption, we expect current trend in consumption of fresh and paste tomato but an increasing demand for ketchup and ready meal due to the changes in life style.

According to improvements of Iran's government foreign policies and growing market of the neighbor countries, especially Iraq and Russia, the demand for processed tomato, mainly in paste, will increase in these countries in future. Of course tomato paste volume exported by Iran heavily depends on the competing prices in comparison with the other exporting countries such as Turkey and China. On the other hand, other neighbor countries such as Afghanistan and Tajikistan will absorb the greater portion of Iran tomato products export rather than past few years. Furthermore, we expect that because of more use of drip irrigation method and hybrid seeds in the future, the total volume of produced tomato, and thus processed tomato, will increase which it means higher exported processed tomato volume.
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