Tomato paste industry in Iran

Tomato paste is one of the most widely used seasonings for fried or cooked foods. In the past, Iranian women often used to prepared this to be widely used seasoning at home. The production of this popular product, like other seasonings, has become industrialized due to lifestyle changes, population growth, lack of facilities for all families, etc. This made the tomato paste industry in Iran to be one of the largest and most popular industries in the country today. This article introduces you to the tomato paste industry in Iran.

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• The amount of cultivation and production of tomato paste in Iran

The amount of tomato production in Iran is much higher compared to the global production of this product. The global yield of tomatoes per hectare is 27 tons; But in Iran, is about 38 tons of tomatoes are harvested from each hectare of land. According to the ministry of agriculture (JIHAD) for the crop year 2022, the amount of tomato production was 7 million tons, which accounted for 9.2% of the total amount of crop production.

Usually, for every 100 kg of fleshy and juicy tomatoes, 10 to 15 kg of paste is obtained.
Tomato processing and packaging industries, including paste, dried tomatoes, etc., until the end of 2018, are as follows: 
 

Production Amount: 577389​

Number of Producers: 145

 

In Iran, 175,000 hectares of land are cultivated with tomatoes every year, and an average of 40 tons of produce is harvested from each hectare, which is a total of 7 million tons harvested annually in the country. In the country, we have 145 tomato paste production units, whose nominal annual production capacity is 600,000 tons of paste. Out of this amount, 345,000 tons are used for domestic consumption, 60,000 tons are stored in stores, 60,000 tons are in producers' warehouses, and 180,000 tons are exported, so the per capita consumption of paste in the country is about 4.3 kilograms per person. Iran is self-sufficient in tomato production and has an excess of domestic demand, which is exported both as fresh produce and paste and sauce, and earns about 200 million dollars for the country annually.

The high competition between domestic producers and the government's supervision and intervention in the price of the final product have caused this industry to have a low profit margin. Paste production companies have always sought to reduce overhead costs in order to gain more profit margins and increase their competitiveness, so that they can increase productivity, so more successful companies take advantage of more up-to-date equipment, new packaging methods and the development of export markets. Considering that the paste is one of the basic needs of the household, these companies generally do not have sales problems and are almost never removed from the household basket. High bank interest rate, high value added tax, lack of liquidity and working capital and lack of fixed rules in the field of product export are also problems of this industry in Iran.

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• Export of tomato paste and its effect on the domestic price

One of the factors that can encourage tomato farmers to grow this product is its export to neighboring countries and the Persian Gulf region. The export of Iran's tomatoes, both fresh and processed, is one of the sources of foreign currency and a factor in the country's economic prosperity. Currently, Iran ranks sixth in the world in terms of the export of tomato paste products. About 7 million tomatoes are produced in Iran every year. Of this amount, about 800,000 tons are allocated for the production of various tomato products, and more than 130,000 tons are exported abroad.

Turkey and Russia are two very good markets for selling and exporting tomatoes and its products.

In total, the countries of Iraq, Turkey, Russia, UAE, Afghanistan, Kazakhstan and Oman are the most important export destinations of Iran's tomatoes and tomato paste.

Unfortunately, the decrease in the value of the national currency compared to the increase in the value of foreign currencies has caused many tomato paste producers to consider the majority of their products for export in order to earn more profit. This issue has finally caused a significant increase in the volume of tomato paste exports and a decrease in its supply in the country. Now that the volume of purchase demand in the domestic markets has not surprisingly decreased, but in some periods of time, due to the false excitement caused by the concern of the lack of supplying and availability to local market of this products, some people buy more than they need. This has affected the tomato paste market.

All these factors will eventually increase the price of tomato paste in the country. The best way to control the price of tomato paste in the Iranian market is to prevent non-original and unqualified exports and government support for producers. Also, the high export volume of tomato paste has caused the price of this product in the domestic markets to be affected by the strong fluctuations in the dollar price.

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Due to the fact that the price of the dollar is always associated with strong and upward fluctuations, the price of tomato paste is constantly changing in the domestic markets. Meanwhile, the decrease in the exchange rate affects the final price of this product.