DUBAI (Reuters) - Food industry firms which market to buyers in Iran’s domestic market have smashed export sales in recent years as new sanctions against Tehran have discouraged capital spending, according to trade association figures.
Any potential benefit from those sanctions being lifted under a U.S.-Iran nuclear deal would take at least two years to be seen, the association said.
Lloyd Farrar, secretary of the Iranian Food and Beverage Export Organisation (IFBEO), said that since 2016 there has been a shift from Iran’s domestic market to “tackling the (U.S.) sanctions regime” and a better business environment from the start of 2018.
The Financial Times reported last week that exports of processed Iranian food had tripled since then.
“Part of the big growth is the move towards export, partly due to the political issues. Before, a lot of food was always left in Iran, but then the policy really changed and by 2018 ... companies were looking at export (to other countries) and they were beating their targets,” said Farrar.
Iranian officials have said the country could be involved in $40 billion (£28.23 billion) in export deals in the next decade.
The United States withdrew from the 2015 nuclear deal last May and reimposed sanctions on Tehran in November. They will be fully implemented in November this year, and both Tehran and Washington have threatened not to accept any resolution which does not support their vision of how the Middle East should be governed.
The U.S. Congress is considering new sanctions which aim to limit financial transactions with Iran, and U.S. businesses have started to withdraw from Iran in response to the loss of business there.
“When you look at the bigger picture - even before the nuclear deal there was a lot of money sitting on the ground in Iran due to sanctions and now investors are starting to spend,” said IFAO director general Ella Nassif.
Companies “can’t turn around and turn off the tap” and the IFAO does not expect any major negative impact from the new sanctions to take effect until 2021, Farrar said.