Unmanufactured tobacco and refuse market in Iran

Earlier Report Observations

From 2018 to 2020, the Iranian unmanufactured tobacco market volume contracted from 25 738 t to 21 324 t. This decline was primarily driven by falling imports, linked to strengthened anti-smuggling enforcement under the law on combating goods and currency smuggling, as well as the imposition of a 15% duty on imports of raw and processed tobacco. Domestic production held steady at around 21 000 t annually, led by the state-owned Iran Tobacco Company, while new product segments like flavored hookah tobacco with diverse fruit tastes gained traction in the market.

The market surged in 2021–2022, reaching 33 454 t in 2022—a 57% increase from the 2020 low. This growth was fueled by a sharp rise in imports, which jumped from 2 922 t in 2020 to 19 531 t in 2022, following changes to import duties on raw and processed tobacco and a trend of imports exceeding domestic needs. Concurrently, the flavored hookah tobacco segment expanded, attracting new brands such as Mezaya and Al‑Fakher, and Iran Tobacco Company pushed to boost domestic processing capacity, including the launch of a new 150–200 t industrial plant in Chenaran.

In 2023, market volume fell to 24 430 t as imports dropped to 9 561 t and production decreased slightly, marking a correction after the previous period of elevated imports while overall consumption remained above pre‑2021 levels.

Production unmanufactured tobacco and refuse in Iran

In kind, 2017-2020, t

Top producers of unmanufactured tobacco and refuse, 2017-2020

World map of production of unmanufactured tobacco and refuse, 2017-2020

In 2019, Iran's production of unmanufactured tobacco and refuse saw its largest decline of 2.5%. However, in 2020, production rebounded slightly to 21 507 tonnes, marking a 0.6% increase compared to 2019. The peak production occurred in 2018 at 21 931 tonnes, which represented the largest increase of 3.4% during this period.

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

Exports unmanufactured tobacco and refuse from Iran

Exports in kind, t

Iran's exports of unmanufactured tobacco and refuse have grown for three consecutive years. In 2020, exports reached 3 105 tonnes, showing a significant 14.5% rise from 2019. Over the 2017-2020 period, exports increased by 60.1%, with a compound annual growth rate of 17.0%.

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

From 2017 to 2020, Russia, Azerbaijan, and Kazakhstan were the top contributors to Iran's exports in kind. Russia accounted for 37.7% of exports, Azerbaijan for 26.6%, and Kazakhstan for 21.5%. Together, these three countries represented 85.8% of total export flows.

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, K $ US

Export values showed considerable volatility during these years. In 2018, exports hit their lowest point at 1 620 thousand US dollars, while in 2019 they peaked at 7 575 thousand US dollars, representing the largest increase of 367.6%. By 2020, export values dropped to 4 975 thousand US dollars, a sharp decline of 34.3% from the previous year, with a 4.7-fold difference between the high in 2019 and the low in 2018.

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

Between 2017 and 2020, Russia, Azerbaijan, and Kazakhstan were Iran's main export markets in value terms. Russia contributed 43.5% of export value, Azerbaijan 31.9%, and Kazakhstan 9.0%. Collectively, these three countries accounted for 84.5% of total export flows.

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

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

Imports unmanufactured tobacco and refuse to Iran

Imports in kind, t

Iran's imports of unmanufactured tobacco and refuse have declined for three consecutive years. In 2020, imports totaled 2 922 tonnes, a substantial 32.6% decrease from 2019. Over the 2017-2020 period, imports fell by 77.4%, with a compound annual decline rate of 39.1%.

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

From 2017 to 2020, the United Arab Emirates, Germany, and Zimbabwe were the principal sources of Iran's imports in kind. The UAE accounted for 23.3% of imports, Germany for 17.4%, and Zimbabwe for 16.1%. Together, these three countries made up 56.8% of total import flows.

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, K $ US

Iran's import value for unmanufactured tobacco and refuse has decreased for three consecutive years. In 2020, imports reached 19 692 thousand US dollars, a robust 21.8% decline from the previous year. Between 2017 and 2020, imports fell by 79.5%, equivalent to an annualized decline rate of 41.0%.

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

Over the 2017-2020 period, Germany, Turkey, and Brazil were the primary suppliers of unmanufactured tobacco and refuse to Iran in value terms. Germany accounted for 21.7% of import value, Turkey for 17.9%, and Brazil for 15.9%. Collectively, these three countries represented 55.6% of total imports in value terms.

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

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