New Pricing Framework Aims to Stabilize Domestic Meat Market
In a significant move to address market volatility, the head of the National Livestock Supply Council has outlined a new strategy centered on domestic production and calibrated imports. The announcement comes amid a complex economic landscape where previous import mechanisms have fallen short of their market-regulating goals.
A Shift in Import Dynamics
For years, red meat imports have been a government tool to balance supply and demand. However, recent shifts in foreign exchange policy have complicated this approach. Reports indicate that imports currently fulfill approximately 20 percent of the nation’s red meat requirement. A key change has been the removal of preferential exchange rates for meat imports, transitioning them to the competitive NIMA system. This policy adjustment has directly contributed to a sharp increase in the cost of imported meat, raising fundamental questions about the efficacy of relying heavily on foreign supply and its impact on local producers.
Market Realities and Consumer Strain
Mansour Purian, referencing recent market trends, detailed the consequences of these policy shifts. “The removal of the preferential exchange rate and the change in the currency allocation process for imported goods, especially meat, led to a price surge in this commodity group,” he stated. The transition away from the subsidized rate caused a noticeable jump in market prices.
He further highlighted the direct impact on consumers, noting, “Current prices are not acceptable for consumers, and a large segment of the population has effectively lost the ability to purchase meat.” Purian provided a stark comparison: while Brazilian meat was previously sold for 300,000 to 420,000 Tomans, it has now reached approximately 650,000 Tomans. Even Indian meat has reached price levels misaligned with market purchasing power.
A Call for Rationalized Pricing and Distribution
A critical point raised by the Council is that imported meat has now become significantly more expensive than its domestic counterpart. “There is no justification for frozen imported meat to enter the market at 600,000 to 650,000 Tomans,” Purian asserted. Compounding the issue, a substantial portion of these imported goods has fallen into the hands of speculators who offer them at inflated prices, despite a clear lack of consumer demand.
With the current price for domestic live cattle and sheep standing at around 330,000 Tomans, the market is experiencing a severe demand slump. This has created a palpable stagnation. “We are now facing the phenomenon of ‘stagflation’ in the meat market,” Purian explained, “and households have serious hesitations about purchasing meat.”
The new pricing initiative is positioned as a decisive step to break this cycle, re-establish stability, and prioritize the health of the domestic market for the benefit of both producers and consumers.