A total of 763,000 tons of wheat worth $306 million were imported into Iran during the first month of the current Iranian year (March 21-April 20), registering a 120% and 197% rise in tonnage and value respectively compared with the similar period of last year, new data released by the Government Trading Corporation show.
The almost threefold rise in wheat import prices came amid the global increase in wheat prices following the Ukraine-Russia conflict, drought, low precipitation and shortage of the staple grain, Fars News Agency reported.
GTC, affiliated with the Agriculture Ministry, is the lever for enforcing market controls and in charge of maintaining a supply of wheat, rice, cooking oil, sugar and meat for the country’s strategic reserve of essential goods.
Ataollah Hashemi, the head of National Wheat Farmers Foundation, estimates that this year 5.5-6 million tons of wheat will be produced in Iran.
“Our demand in bakery and industry sectors stands around 10 million to 11 million tons per year. This means there would be a need to import some 5-6 million tons of the grain by the end of the year,” he added.
The government has so far bought a total of 2.24 million tons of wheat worth 237.45 trillion rials ($742 million) from local farmers since the beginning of the harvest season on March 24, showing a 29.37% and 172% respective growth compared with the similar period of last year.
This year, guaranteed purchases started from the provinces of Sistan-Baluchestan, Kerman and Khuzestan all in southern Iran, and has since extended to 13 more provinces across the county.
GTC is purchasing the grain at 115,000 rials (close to $0.36) per kilo from domestic farmers this year, which is twice the price the government had set for guaranteed wheat prices last year.
Considered a staple in Iran, wheat is purchased every crop year by the government to build up its reserves and supply the market over time.
Some 20% of Iran’s wheat imports were from Ukraine in the last Iranian year (March 2021-22), according to the head of Iran’s National Wheat Farmers Foundation.
“The war between Ukraine and Russia, both among the main exporters of wheat in the world, has negatively impacted the international market of the grain. Moreover, global water shortage and drought have lowered wheat production across the world and right now the market is tumultuous,” Hashemi was quoted as saying by IRNA.
Ukraine, according to the official, accounts for 10 million tons or 10% of the global wheat exports and is the fifth biggest exporter of this staple grain, yet based on the latest figures released by the Food and Agriculture Organization of the United Nations, the country has lost more than half of its annual production this year.
“Because of US economic sanctions imposed on Iran, which already makes trade a challenge, our domestic market supply is more at risk in this situation,” he said.
“Russia and Ukraine have been traditional suppliers of the staple grain as well as corn and oilseeds to Iran for years. Other countries, too, buy part of their demand for wheat from the two countries now engaged in war. We import wheat from Germany, Australia, Canada and Argentina as well,” the head of Federation for Iranian Food Industries Associations, Mohammad Reza Mortazavi, was quoted as saying by ILNA.
Noting that up until May, prices of agricultural products rise every year, the official said this year the conflict between Ukraine and Russia has also impacted global prices, adding that over the past six months wheat has seen the highest price rise in the past five years.
“The war has also made other nations think about purchasing agricultural products and foodstuff, and store them to ensure supply to their local markets. Whenever Egypt and China in particular start to fill up their reserves, the international market goes through another price hike. We hope that with the beginning of harvest season, prices will come down,” he added.
“We, like other states, need to import goods to fill up our strategic reserves, but I believe the best time to make purchases for this purpose are the four months after May, that is June, July, August and September when harvest takes place and prices are moderate. Right now, global prices are at their highest level and if, hopefully, the war in Ukraine comes to an end and no other wars are waged, we can be optimistic that prices will decline in the international market.”
Over the past 30 years (March 1992-2022), Iran has imported 96.48 million tons of wheat worth $22.84 billion, according to the spokesperson of the Islamic Republic of Iran Customs Administration.
“The highest volume were imported in the fiscal 2014-15 with 7.43 million tons, 2021-22 with 7.07 million tons and 2001-2 with 6.77 million tons,” Rouhollah Latifi was also quoted as saying by ILNA.
The official noted that the lowest wheat import figure pertains to fiscal 2018-19 with only 360 tons.
During the same year, he added, wheat prices were the highest in the 30-year review with close to $0.70 for each kilogram. Fiscal 1994-95 saw the lowest import price for the grain at nearly $0.10 per kilo.
