The breakthrough shipment followed strenuous efforts over the past couple of years to restore access to a market that in the early 1980s took one in every four sheep processed in NZ.
Primary Industries Minister Nathan Guy cleared the way for a resumption of the trade when he concluded a veterinary agreement with his Iranian counterpart in Tehran in February.
However, NZ’s largest exporters remained wary and were yet to dip their toes back in the market.
Taylor Preston chief executive Simon Gatenby admitted there had been hoops to jump through before the export order – initially only 50 tonnes – could get on the water.
They included a requirement for two officials from the Iranian Veterinary Organisation to be present at the company’s Ngauranga plant near Wellington during slaughter and processing.
The government officials would be there to ensure meat bound for Iran was processed according to its veterinary and Halal standards.
The first NZ shipment to Iran since 1998 would comprise frozen carcases separated into six primal cuts.
“We will get to know the customer and he will get to know us and know the rules with a simple and easy specification to get into the market.”
However, the customer – an established Iranian importer of NZ primary produce who Gatenby would not name for commercial reasons – had also expressed interest in higher-value lamb cuts and beef.
“We are very keen for that to happen because it represents an increase in value and we think the opportunity is there for both chilled and frozen to a higher level specification.”
Iran emerged as a white knight for the industry in the 1980s as it searched the world for new markets to deal with a surge in subsidised sheep meat production at the same time as demand from Britain slackened.
Iran imported well over 100,000 tonnes of sheep meat a year from NZ between 1983 and 1986.
Gatenby said the dynamics of the sheep meat industry had changed out of all recognition since that time.
“Back in those days we had 60m sheep. The national kill this year will be a touch under 19m lambs and I am not sure NZ needs a new market that would take tens of thousands of tonnes a year.
“We want a steady, high-value market that will absorb some volume without putting pressure on price.”
Meat Industry Association chief executive Tim Ritchie said Iran tapered off in the early part of the 1990s as oil prices fell and technical barriers emerged and shut off completely by 1999 as result of international sanctions.
But the lifting of sanctions in 2015 following a deal for Iran to rein in its development of nuclear weapons had cleared the way for the Government to reach an agreement on veterinary protocols earlier this year.
About 100,000 tonnes of meat, mainly beef from Brazil, was imported into Iran each year.
Now sanctions were lifted Iran wanted to lift its imports of lamb, Ritchie said.
“Given the previous trading relationship and NZ’s reputation for quality product they are very keen to do business with NZ.”
But despite its potential and the removal of obstacles to the trade resuming NZ’s largest sheep meat exporters remained on the sidelines.
Following a trip to Tehran with Trade Minister Todd McClay earlier this year Silver Fern Farms chairman Rob Hewett said he shied away from making an immediate commitment.
It would take time re-establish contacts in the Iranian market and he did not expect any sales this season and could not guarantee a resumption next season either.
Alliance chairman Murray Taggart said his co-operative had its hands full in India and Brazil and was in “no rush” to establish itself in another new market.
“Also, there are challenges in dealing with Iran that there aren’t in some of these other markets.”
At a private meeting in Auckland last September McClay gave the Australian-owned banks a ticking off for not backing the Government’s efforts to re-establish trade with Iran.
But that seemed to have made little difference to the banks, which remained wary of settling export transactions with Iran.
Proceeds from sales to Iran could be routed through banks in Dubai but that came with an additional cost of 10%-15% and was on top of Iranian tariffs for sheep meat imports of 5%-40%.
Bankers Association chief executive Karen Scott-Howman said members could be stripped of their United States banking licences if they were found to be dealing with Iranian banks with links to terrorist organisations and it was a risk most were not yet ready to take.
Guy said there was a limit to what the Government could do to encourage the banks to back their clients in Iran.
“We have had those discussions. It is up to exporters to find a financier who will bank them into this market.
“And, of course, competition is a great thing."
