By Mahnaz Abdi

Sweets, chocolates export of $1b targeted, but production faces challenges

November 9, 2020 - 12:2

The confectionery and chocolate industry is one of the oldest food industries in Iran, and it is now the second-largest exporter in the country's food sector after the dairy industry.

About 100 percent of the investment in this industry belongs to the private sector and most of its products are competitive globally.

The advantage of the confectionery and chocolate industry is the supply of its raw materials inside the country.

With this advantage, any investment will bring profit to this industry.

As a result of supporting domestic producers and products and banning the import of foreign products in this sector, Iranian producers are now able to meet the needs of the domestic market and are welcomed by domestic consumers.

This industry is also targeted to boost export to different markets all around the world.

Iran exports sweets and chocolates to 66 countries and the annual export of $1 billion has been planned for this industry.

The latest data in terms of exports show that Iran has exported $250 million of sweets and chocolates during the first half of the current Iranian calendar year (March 20-September 21).

Neighboring countries, Persian Gulf littoral states, Commonwealth of Independence States, and Europe have been the major export destinations of these products in the mentioned period of time.

The Chairman of the Association of Iranian Confectionery Manufacturing Companies Jamshid Maghazei says that the country’s annual export of sweets and chocolates is estimated to reach $550 million-$600 million this year.

While the industry is trying to materialize the objective of surge in production and also boost export, it is facing some challenges especially in terms of production, as the production costs are increasing.

Meanwhile, the sanctions and coronavirus pandemic have made access to global markets difficult, and domestic demand has also declined.

The chairman of the Association of Iranian Confectionery Manufacturing Companies has said that due to the sanctions, the import of raw materials and essences from Europe has been stopped and products from Southeast Asian countries such as Malaysia, Indonesia, and China have been replaced, which are of much lower quality.

For this reason, the overall quality of confectionery and chocolate products has also changed, Jamshid Maghazei said.

In terms of exports, this industry has experienced a decline in the past year, as the exports stood at $500 million, which was 30 percent lower than the figure for its preceding year.

It is while, according to Maghazei, Iran is capable of exporting $1.5 billion of sweets and chocolates just to the regional countries such as Iraq, Afghanistan, and the Persian Gulf littoral states.

On the other hand, according to the secretary of the Biscuit, Confectionery and Chocolate Industries Association of Iran, the problems in the supply of raw materials such as sugar, oil and wheat, as well as exchange rate fluctuations and raw material prices reduce Iran's competitiveness in export markets; because when export commitments are not fulfilled in the established markets for any reason, export competitors replace Iran, and it is difficult to revive these markets.

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