Waning domestic demand drives Iranian dairy exports
Iran exported 515,800 tonnes of dairy products to 37 countries during the first 10 months of 2024, which is 15% up compared with the previous year, the Iranian government revealed. In value, the country’s exports jumped by nearly 40% to US$827.4 million.
Exports are driving the growth in Iranian dairy production, Vahid Mofid, vice chairman of the board of directors of the Dairy Industries Association, told local news.
“This year, we see a slight increase in production, but this increase in production did not result in an increase in consumption and the additional quantities were primarily delivered for exports,” he added.
Dairy consumption has long been a subject of public and government attention in Iran. The economic crisis that has been raging in the country for some years now, characterised by high inflation and a weakening national currency, pushed dairy consumption below the standards prescribed by national healthcare.
Falling domestic demand
For the year ending March 2025, dairy consumption in Iran is projected to inch down again, Mofid said, admitting that the retail price of dairy products in Iran has risen in the current year while consumer purchasing power stagnates.
“What is mostly exported from Iran in the dairy sector is industrial powdered milk, butter, and a small amount of cream. In addition, products such as cheese, buttermilk, yoghurt, etc., are also exported, but in terms of financial value, they generated less revenue,” Mofid stated.
A slump in the rial’s exchange rate against the dollar in the current Persian year (March 2024 – March 2025) has made Iranian dairy products more competitive on the global market, he stated.
Export out of necessity
Around 80% of the dairy exports from Iran are going to neighbouring Iraq, Pakistan and Afghanistan, Mohammad Farbod, spokesman for the Iranian Dairy Products Industry Association, has revealed.
Iranian dairy companies resort to exporting “out of necessity” to keep their production units running, he added, citing the official calculation showing that dairy consumption per capita in the country plunged below 70 kg.
Farbod assumed that dairy exports help to constrain the rise in prices at the internal market. He explained that without exports, Iranian dairy manufacturers would see their capacity utilisation ratio decline, and due to the effect of scale, this would be reflected in final prices.
The average profitability in the dairy industry is low, limited to only 4%, he estimated.
