The share of Iran Fisheries Organization in Agriculture Ministry’s subsidized inputs was not more than 1-2% per month yet it was a great help to fish feed producers and also gave the bargaining power over pricing to the organization in its negotiations with producers, an official with the organization said.
“With the removal of this subsidy, Iran’s Fisheries Organization lost its leverage to change prices,” Morteza Afrasiabi was also quoted as saying by ILNA.
“Fish feed prices have increased by 30-35%. The consumer prices of fish, particularly cold-water fish that accounts for 90-95% of domestic consumption, has increased. Fish prices increased from 600,000-700,000 rials per kilogram last [fiscal] year [2021-22] to 1-1.1 million rials at present. The production of fish and other aquatic species is expected to reach 708,000 tons this year [2022-23].”
The sudden price rise came after the government recently decided to abolish the controversial practice of allocating cheap dollars at the rate of 42,000 rials per dollar, locally known as Preferential Foreign Currency, to import essential goods, including corn, soymeal, unprocessed oil, oilseeds and barley, in addition to wheat, flour and medicine.
Instead, it is depositing cash directly to the account of income deciles 1 to 9.
The market value of the dollar is above 300,000 rials now.
“Until now, we have been paying to producers [read importers] but now the subsidies go to consumers. In fact, the Preferential Foreign Currency has not been ceased, rather the allocation method has changed,” President Ebrahim Raisi said in a televised speech on the eve of the introduction of the move earlier this month.
In his speech, Raisi emphasized that the removal of cheap dollar allocation will not lead to a price rise in wheat, flour, medicine and gasoline. However, the move has led to a dramatic rise in the prices of essential goods.
Also known as necessity or basic goods, essential goods are products consumers will buy, regardless of changes in income levels.
The prices of other food industry products have also risen suddenly in a ripple effect.
The average annualized food inflation stood at 49.6% in the month to May 21, latest data released by the Statistical Center of Iran show.
The Consumer Price Index of “food and beverage” group stood at 586.1 in the month under review (the second month of the current Iranian year), indicating a 3.3% increase against the previous month.
The index registered a year-on-year increase of 49.6%.
With 26.64%, the “food and beverage” group has a major impact on the overall inflation rate.
