The Producer Price Index for the agriculture sector (agronomy, horticulture and traditional husbandry) in the four-quarter period to June 21, which marks the end of the first quarter of the current Iranian year, increased by 65.8% compared with the year before, new data released by the Statistical Center of Iran show.
The center had put producer inflation of the four-quarter period leading to March 20 (Q4) at 66%.
The overall PPI of this group (using the year ending March 2017 as the new base year) stood at 728.4 in Q1, indicating a 66.2% increase compared with the same quarter of the year before.
Year-on-year producer inflation of the previous quarter had increased by 33.8%.
PPI measures price movements from the seller's point of view. Conversely, the consumer price index measures cost changes from the viewpoint of the consumer. In other words, this index tracks changes to the cost of production.
The importance of PPI lies in its predictive content for the future pattern of Consumer Price Index. Changes in PPI are usually reflected in CPI within a short period of time.
$2.6b in Q1 Agrifood Trade Deficit
Iran recorded an agrifood trade deficit of 3.41 million tons in tonnage and $2.67 billion in Q1, according to the Agriculture Ministry.
Exports stood at 2.16 million tons worth $1 billion, to register a decrease of 10.53% in tonnage and 16.25% in value year-on-year.
Watermelon topped the list of exports with 597,870 tons worth $132.89 million.
Agronomic products accounted for 1.65 million tons worth $521.18 million of total exports, down 8.35% and 4.56% in terms of tonnage and value YOY, respectively.
Horticultural exports amounted to 336,970 tons worth $302.46 million, down 32.52% in terms of tonnage and down 42.27% in value YOY respectively.
Exports of livestock and poultry products reached 143,420 tons worth $157.42 million, down 3.57% in tonnage, but up 24.89% in value YOY.
The fisheries sector exported 24,200 tons worth $51.65 million, posting a rise of 8.37% and 42.3% in total volume and value respectively YOY.
Agrifood imports stood at 5.57 million tons worth $3.7 billion in Q1, indicating a 14.62% and 0.02% YOY decline in weight and value respectively.
Corn with 1.67 million tons worth $637.19 million had the biggest share of imports.
Agronomic products accounted for 5.21 million tons worth $3.08 billion of total imports, down 14.87% and 0.28% in tonnage and value YOY, respectively.
Horticultural products stood at 308,060 tons worth $429.69 million, down 15.58% and 1.1% in tonnage and value respectively YOY.
Imports of livestock and poultry products hit 40,300 tons worth $118.64 million, up 76.4% and 39.92% in tonnage and value YOY, respectively.
Imports by the fisheries sector amounted to 540 tons worth $2.66 million, down 80.21% and 63.14% in tonnage and value YOY respectively.
The agriculture sector in Iran is facing a severe drought.
Masoud Khansari, president of Tehran Chamber of Commerce, Industry, Mines and Agriculture, says Iran is likely to lose 70% of its agricultural land in the future.
“Experts have sounded an alarm about this grave danger but so far little attention has been paid to this challenge,” he wrote for the Persian economic daily Donya-e-Eqtesad.
“The Food and Agriculture Organization of the United Nations issued in its latest report a stark warning of multiple, looming food crises, driven by conflict, climate shocks, the fallout from the Covid-19 pandemic and massive public debt burdens, exacerbated by the ripple effects of the war in Ukraine that has led to food and fuel price hikes in many countries. It also warned about the shortage of water resources in Iran, saying Iranian farmers consume two to three times the global average of water consumption to cultivate corn, rice and wheat per hectare. Experts recommend the government to employ 10-year water austerity measures rather than adopting a political stance to resolve this issue.”
