Butter, dairy spreads and milk fats market in Iran

Earlier Report Observations

From 2018 to 2020, production of butter and milk fats in Iran increased from 379 thousand tonnes to 420 thousand tonnes, while the market size remained stable around 430 thousand tonnes. This growth was primarily driven by the ongoing breeding of Simmental cows to increase milk fat content, which improved the efficiency of butter production. In 2020, the COVID-19 pandemic reduced global butter demand, but Iranian output continued to rise, partly due to a decline in milk powder exports that redirected raw milk towards butter manufacturing.

Production peaked at 444.6 thousand tonnes in 2021, supported by active exports of milk powder and butter to regional markets under Iranian brands. However, in 2022, output fell sharply to 380.8 thousand tonnes. This decline coincided with an 18.5% drop in export prices for milk powder, which may have reduced processing incentives, and increased butter exports to countries like Russia and Oman, diverting production away from the domestic market. Unrestrained exports and persistent domestic pricing issues further disrupted supply. Additionally, the school milk distribution program, which uses milk with 2.5% fat, altered raw material allocation by separating fat for butter production.

In 2023, production recovered to 428.2 thousand tonnes. Continued cattle breeding for higher milk fat content aided this rebound. However, butter prices surged by 80% due to a 20% increase in raw milk prices coupled with lower milk powder prices, leading to market shortages. In response, the dairy industry association held a meeting to set prices for butter and cream, aiming to ensure stable market supply.

Production butter, dairy spreads and milk fats in Iran

In kind, 2017-2020, K t

From 2017 to 2020, Iran ranked 11th globally in the production of butter, dairy spreads, and milk fats.

Top producers of butter, dairy spreads and milk fats, 2017-2020

World map of production of butter, dairy spreads and milk fats, 2017-2020

Butter, dairy spreads, and milk fats production in Iran increased for the second consecutive year. In 2020, Iran produced 420.0 K t of these products, marking a substantial rise of 10.6% compared to 2019. Over the 2017-2020 period, production grew by 7.7%, with a compound annual growth rate of 2.5%. The lowest production level was recorded in 2018 at 379.1 K t, which also saw the largest decline of 2.8%.

Annual dynamics of production in Iran in kind, 2017-2020, K t

Exports butter, dairy spreads and milk fats from Iran

Exports in kind, t

The market experienced noticeable fluctuations during this period. Export volumes peaked in 2018 and dropped to their lowest point in 2019, showing an 18-fold difference between these years. In 2020, Iran exported 77 t of butter, dairy spreads, and milk fats, representing an uptick of 27.8% from the previous year. The minimum value was 61 t in 2019, while the maximum was 1 080 t in 2018. The largest decline occurred in 2019 at 94.4%.

Annual dynamics of product's exports from Iran in kind, 2017-2020, t

From 2017 to 2020, Iraq remained the dominant export partner for Iran's butter, dairy spreads, and milk fats, accounting for 72.7% of total flows, with other markets forming a long tail.

Structure of product's exports in kind by countries, 2017-2020

World map of product's exports from Iran in kind, 2017-2020

Exports in value, M $ US

Volatility characterized the market behavior during these years. Export values peaked in 2018 and reached their trough in 2020, with a 21-fold gap between these periods. In 2020, Iran's exports of butter, dairy spreads, and milk fats amounted to 0.2 M $ US, reflecting a significant decline of 13.1% compared to the previous year. The maximum value was recorded in 2018 at 5.1 M $ US. The largest decline occurred in 2019 at 94.4%, while the largest increase was in 2018 at 14.9%.

Annual dynamics of product's exports from Iran in value, 2017-2020, M $ US

From 2017 to 2020, the export structure in value terms was strongly focused on Iraq, which accounted for 75.6% of total flows, with other partners making up the remaining volume.

Structure of product's exports in value by countries, 2017-2020

World map of product's exports from Iran in value, 2017-2020

Imports butter, dairy spreads and milk fats to Iran

Imports in kind, t

The market exhibited an unstable trend throughout this timeframe. Import volumes peaked in 2019 and dropped to their lowest in 2020, showing a 5.1-fold difference between these years. In 2020, Iran imported 9 801 t of butter, dairy spreads, and milk fats, which is 80.5% lower than in 2019. The maximum value was recorded in 2019 at 50 234 t, and the largest increase occurred that same year at 54.1%.

Annual dynamics of product's imports to Iran in kind, 2017-2020, t

From 2017 to 2020, the United Arab Emirates and Turkey together captured 83.7% of total imports in kind, with the rest of the flows thinly spread across other markets.

Structure of product's imports in kind by countries, 2017-2020

World map of product's imports to Iran in kind, 2017-2020

Imports in value, M $ US

The market exhibited an unstable trend throughout this timeframe. Import values peaked in 2019 and reached their lowest in 2020, reflecting a 6-fold gap. In 2020, Iran imported butter, dairy spreads, and milk fats worth 0.2 M $ US, down by 83.3% from the previous year. The maximum value was recorded in 2019 at 308.6 M $ US, and the largest increase occurred that same year at 45.3%.

Annual dynamics of product's imports to Iran in value, 2017-2020, M $ US

From 2017 to 2020, the United Arab Emirates and Turkey were the dominant destinations for imports in value terms of butter, dairy spreads, and milk fats to Iran, jointly accounting for 85.0% of total flows, while the remaining volume was split among smaller markets.

Structure of product's imports in value by countries, 2017-2020

World map of product's imports to Iran in value, 2017-2020