Dear Dr. Gholamreza Nouri Ghezeljeh,
the Minister of Agriculture Jihad
It is recalled that this year (2024-2025) the fertilizer situation of the country is faced with many problems and has been challenged due to difficult production conditions and the numerous obstacles created by the government. Since 2023, the Central Bank has prevented the import of raw materials by announcing the government’s resolution, which was notified to the banks with one year delay, under the pretext of removing foreign exchange obligations, and after 15 months, this obstacle has still not been removed and it is not possible to implement this resolution. However, basic fertilizer producers procure their raw materials from foreign sources, produce and sell their products through the government network at the approved price, and the foreign exchange obligations are also removed.
- Since 01/21/2024, no foreign currency has been given to factories to purchase raw materials, and they have been under pressure due to the internal sanctions imposed by the government. Some of them are closed, while others are producing at 10% capacity. All manufacturers have announced that it is not possible to continue production under the current conditions, and production in this sector will also stop and more than 2,000 workers and employees will be added to the country’s huge number of unemployed by the end of the year.
- State-owned companies are the cause of inflation in the country: In the past 6 months, the National Oil Company has tripled the price of sulfur- the basic raw material for fertilizer production, last month, the National Copper Company has increased the price of sulfuric acid by 2.5 times by sending an SMS, and the National Petrochemical Company has increased the price of urea and nitric acid by 2.5 times. Now the question is why the government does not supervise the producers of agricultural input raw materials, most of which are also national companies. The supervisory organizations are only responsible for controlling the price of chicken and eggs?! Are these organizations only responsible for supervising the private sector and do not have the right to supervise state-owned companies?!
- Given the present circumstance, it is not possible to continue producing agricultural inputs. Fertilizer producers continued to struggle on for more than a year despite all the problems, but it is truly impossible to continue the current situation. It seems that the government has made a strategic mistake, and due to the failure to remove obstacles in the near future, it will have to pay 5 times the foreign exchange required for input production raw materials to buy ready-to-consume goods. Is the government really not aware of the consequences of these obstacles?!
- The government bodies always make decisions behind closed doors for the production sector and avoid participating with the private sector. These decisions, due to lack of awareness of the manufacturing problems in the country, have caused many hardships in the production sector, and in general, such decisions are mostly not applicable in production and increase the cost price of products and services.
- Although, on 12/21/2024, the Minister of Agriculture Jihad ordered the former Deputy of Commercial Development to urgently resolve the problems of foreign exchange supply, unfortunately, no action has been taken to date. Is it justifiable for an industry that is like a patient in the ICU and is in dire need of oxygen to experience so much delay?! Why does the Minister not supervise the units under his control?
- Production costs have skyrocketed in the past two years. The increase in energy costs, frequent power, gas and water outages in industrial estates are taking the last breaths of producers. Is there a trial? It seems that talking alone won’t solve the problems and with these production conditions, the country is on the verge of destruction.
- In the past years, the Supreme Leader has always placed emphasis on supporting domestic production, and in his recent statements, he emphasized that resolving problems is only possible with the participation of the private sector, but the government sector continues to not involve trade unions in decision-making and is destroying production in the country with its decisions. If the current trend continues, the country will face many challenges in maintaining food and social security, in the near future. As long as the conditions do not change in favor of production in the country, the problems will increase, and decisions for the country’s production cannot be made behind closed government doors.
Best Regards,
Sayyad Farhadi
President of the Chemical Fertilizer Producers Association
