While a deal is not a certainty, the possibility of Iranian sanctions being lifted once again is being watched by NZ meat exporters.
Russia’s invasion of Ukraine has set off a chain of events, which could open the door again for New Zealand meat exports to Iran.
Meat exporters were poised to dive back into the market six years ago after Western sanctions were lifted in return for Iran agreeing to scale back its nuclear capabilities.
But the trade failed to get off the ground after claims the Iranians were testing missiles prompted former President Donald Trump to reimpose American sanctions.
But the jump in oil prices following Russia’s invasion of Ukraine has the United States reconsidering its position and negotiations with Iran have moved closer to a conclusion in recent weeks.
Russia is the world’s third-largest oil producer and moves by the West to wean itself off the country’s energy has prompted a scramble for replacement supplies.
While a deal is not a certainty, the possibility of Iranian sanctions being lifted once again is being watched by NZ meat exporters who looked at the market last time sanctions were lifted.
Silver Fern Farms group sales manager Peter Robinson was a member of a delegation led by former Trade Minister Todd McClay to Iran to investigate the market in 2016.
Robinson had been looking for back-up markets for sheepmeat to offset weakening demand in the United Kingdom following the Brexit vote and plunge in the purchasing power of the British pound earlier in the year.
In the early 1980s, the Iranians took one in four lambs processed in NZ as traditional markets like the UK struggled to absorb a surge in production brought on by Muldoon’s subsidies.
“Iran has pretty much been a market that NZ looks to when we have some issues … in 2016 we were in a position when markets were not that strong and we were looking at alternatives to take supply off global markets and help firm those up,” Robinson said.
Robinson met several Iranian importers, but the reimposition of sanctions meant sales were never completed.
“Trump locked down again on the transfer of money out of Iran, but there was genuine demand,” he said.
The trade was made harder again in 2019 following the suspension of direct services to Iranian ports by Maersk and MSC under threat of secondary sanctions on shipping lines from the US government.
“Whether you are going to be able to get product there in a timely manner and with consistent and regular shipping routes and payment … they would be the two big things you would be looking at, along with their ability to match global pricing,” he said.
Robinson said global sheepmeat prices had shifted considerably higher since 2016.
“The UK situation has turned around and we are probably at record levels in terms of pricing of legs into that market … we have seen a move in the global market such that Iran would struggle to compete,” he said.
“That is not to say it is not something we should be looking at.
“It all comes back to having more choices about where we put our products and keeping that global competition strong is an advantage for us.”
Taylor Preston and Affco were the only two NZ meat exporters to re-enter the Iranian market in 2018 before sanctions were tightened again.
Sales were in the low millions of dollars.
Taylor Preston chief executive Simon Gatenby said he would welcome the opportunity to do business with Iran again.
“Unfortunately, there is no prospect of that at the moment,” Gatenby said.
“Our customer is very quiet and even if he wanted something, the payment problem is still a major impediment.”
