Sugar beet production is expected to drop for the next year, as less farmers are interested to cultivate this product.
In 2016, sugar was categorized as “strategic goods” and therefore the government planned to reach self-sufficiency in its production. Annual need of sugar in Iran is between 2.2 to 3 million tons. Previously nearly 2 million tons of sugar was imported to the country, however, this figure dropped to 88,000 tons for the last Iranian fiscal year, i.e. March 2017 to 2018.
The government guarantees to buy sugar beets in order to encourage more farmers to cultivate it and remove marketing complications for them. But as all prices have been rising over the past three quarters in Iran, the government has not announced any increase in its purchase prices. This is discouraging farmers to cultivate sugar beets.
“Prices for fertilizers, energy and labor force have gone up by 50% this year”, explains Jaafar Hosseini, a senior agricultural consultant. “Also, transportation costs have increased. All in all, we estimate an increase of 60% in production costs. Therefore, unless the government increases its purchasing prices by at least 32%, farmers lose interests in cultivating sugar beets for the next season”.
Last year, sugar beets production in Iran reached 8 million tons. But during the current year, in some areas, farmers have already reduced the plots dedicated to sugar beets by 70%. This reduction will have immediate impact on the next year sugar production.