A glance at the difference between the liberalization of the 4,200 and 28,500 Toman currency

The current challenges facing livestock and poultry producers stem from developments over the past few months. Since late September, the country has been facing a shortage of livestock inputs; while gradual price adjustments should have been implemented before the sharp jump in the exchange rate and at a time when the market had more capacity to absorb them, so that their effects would be more bearable. However, this process was not gradual and the market was faced with a sudden shock.

 During the months of input shortages, production conditions were under pressure. With the announcement of the new rate and the implementation of the single-rate policy, producers faced a more severe challenge than in the previous phase of currency reform.

In the previous period, when the 4,200 Toman currency was converted to 28,500 Toman, the warehouses of animal feed factories, livestock farms, and poultry farms were full of inventory for about three months. These reserves acted as working capital, and producers were able to offer their products at the new prices, freeing up some of the financial resources blocked in the previous currency, and adapting to the new conditions.

But in the recent period, the industry entered a single-price phase with empty warehouses, and at the same time, the multiple jump in the exchange rate (about five times) put additional pressure on production, which deepened the crisis and made conditions more difficult.