Last year Taylor Preston became the first exporter in two decades to return to the market, which, in the early 1980s, accounted for one in every four sheep processed in New Zealand.
But industry figures show since that initial shipment of 91 tonnes in June last year just 17 tonnes of sheep meat worth less than $250,000 was sent to the market by the end of March.
Taylor Preston marketing manager Chris Pyke said the company shipped another 100 tonnes to the same customer after March.
The trade came with extra costs including paying for the presence in plants of religiously qualified Iranian nationals as well as its veterinarians to oversee the processing of animals though the returns from the market had so far had justified the extra expense.
The failure of the trade to fire more emphatically is despite the efforts of the last government including the signing of new veterinary protocols expected to ease the path for exporters.
Industry heavyweight Silver Fern Farms participated in a delegation of exporters led by former Trade Minister Todd McClay to Tehran in 2016 and did significant due diligence ahead of an expected entry into the market.
But acting group category manager Peter Robinson said the company had yet to do any business there.
While some sanctions had been lifted following Iran’s agreement with the West in 2015 to rein in its nuclear programme that had not extended to the banking sector, which continued to face impediments because of United States Treasury directives that make it illegal to deal with Iranian banks it says have links to terrorist organisations.
Robinson said that introduced a degree of uncertainty for NZ banks fearful of losing their US banking licences should they be found to have repatriated funds on behalf of exporter clients via Iranian banks blacklisted by the US.
However, possibly even a bigger factor holding back the trade had been the price Iran could pay relative to other markets.
Robinson said SFF’s initial interest in the Iranian market had been spurred by the dramatic fall in returns from the United Kingdom in the wake of the Brexit vote in June 2016 but they had since recovered.
“The Iranian price at the time was looking okay but the price they were willing to pay stayed static while other markets came up and leapfrogged it.”
While SFF could look at the market again if it becomes more competitive, the riskiness of trade with Iran appears to be increasing.
President Donald Trump is expected to announce whether the US will continue to support the 2015 nuclear deal or re-impose sanctions.
“Trump could say ‘nobody trades with Iran or your trade with us is finished’.
“What do you do if you have a thousand tonnes ready to put on the water … it is the sort of decision that he could make overnight.
Of the four major exporters Affco is understood to be the only one to have done business with Iran.
Director Rowan Ogg said the company sees it as a viable market that could improve still further as Iran becomes more comfortable with the standard of NZ processing plants and less stringent veterinary oversight is negotiated.
