The Iranian dairy industry is facing a crisis due to recent government reforms that have led to a surge in retail prices. These changes have resulted in a significant drop in dairy consumption, which could have serious health implications for the Iranian population.
### Impact of Government Reforms
In 2023, the Iranian government made significant changes to the currency exchange system for livestock companies. The reform aimed to ease the national budget but had adverse effects on the dairy industry. The decision to abolish the preferential rate for currency exchange has caused retail prices for dairy products to skyrocket.
### Consequences of Price Hike
The Tehran Chamber of Commerce reported a 30% decrease in dairy consumption in the past year, marking the lowest level in a decade. The steep increase in retail prices, ranging from 20-40%, has made it difficult for many Iranians to afford dairy products. This has led to a decline in consumption below the critical level required for maintaining bone health.
### Health Implications
Jalal Rahmani, vice president of health at Qazvin University of Medical Sciences, highlighted the importance of adequate dairy consumption for bone health. The minimal recommended daily intake of dairy is 250 g, but in Iran, it has dropped to a mere 104 g. This drastic reduction in dairy consumption could lead to an increase in osteoporosis cases in the long run.
### Challenges Faced by Dairy Companies
The Iranian Dairy Products Industry Association, led by Seyed Mohammad Reza Banitaba, expressed concerns over the impact of the price hike on dairy companies. Despite the surge in prices, dairy producers are struggling to cover their operational costs due to price caps imposed by the government. Additionally, rising wages and inflation have further squeezed profit margins for dairy companies.
### Government Policy and Industry Stability
The Consumer Protection Organization and Market Regulation Headquarters have instructed dairy companies to refrain from raising prices during Ramadan. While authorities had initially promised to review the price caps policy and allow a 30% increase for some products, this commitment has not been upheld. Banitaba emphasized that the current government policy forces dairy manufacturers to subsidize consumption at their own expense.
### Decline in Dairy Industry
The Iranian dairy sector has been facing challenges for the past two decades, with nearly 80% of dairy companies shutting down operations. This trend is closely tied to the decrease in dairy consumption over the years. Banitaba noted that the number of dairy companies in Iran has significantly decreased from 1,000 in the early 2000s to just 200 today. He stressed the need to reevaluate the price cap policy and shift the responsibility of maintaining dairy consumption levels away from manufacturers.
### Conclusion
The Iranian dairy industry is at a crossroads, with government reforms and price caps posing significant challenges for dairy companies and consumers alike. The decrease in dairy consumption not only affects the economic stability of the industry but also raises concerns about public health. Addressing these issues will require a coordinated effort from government officials, industry stakeholders, and health experts to find a sustainable solution that ensures a balance between affordability and quality in the dairy market.
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