Iran's vegetable oil industry is quite unstable especially regarding the provision of raw materials. Only ten percent of the vegetable oil in the country is produced inside, with the rest being imported.
Meanwhile there are two threatening factors as follows:
- The global vegetable seeds/oil fluctuation markets. Following the 2006 food crisis, the price of vegetable oil has increased so much.
- The vegetable oil industry is under the strong influence of Iran's currency. The appreciation of currency in Iran and dependence of the country on international markets makes the condition more complicated.
The big energy subsidies and its inefficient effects on economics resulted in no way forward except to rationalize them. Even the private sectors believed in this necessity, although they had to bear the costs. In this situation price adjustments became one of the main subjects as many governments prevented such rationalization due to a fear of inflation pressures.
The Iranian government decided to rationalize energy subsides in Iran. Iran Oilseeds and Vegetable Oil Processing Factories Cooperative (Farda Coop) as an executive wing of the government had an important role to help the government.
Farda Cooperative — as one of the government's consultants — participated in the supply plan to fulfill the factories' requirements to avoid vegetable oil market volatility and price increases to protect consumers.