A total of 9.5 million tons of essential goods were unloaded at Iranian ports of entry during the first five months of the current fiscal year (March 21-Aug. 22), registering an 8.3% decline compared with the similar period of last year, according to the Ports and Maritime Organization.
Wheat was the only commodity whose import saw a year-on-year increase, as 3.1 million tons of the grain were unloaded during the period, up 119%.
Last year (March 2021-22), 7.07 million tons of wheat were imported, according to the Islamic Republic of Iran Customs Administration.
“The private sector has been allowed to place orders for wheat imports as of Aug. 23 after a gap of seven years,” Kaveh Zargaran, the head of the Agriculture and Food Processing Commission of Tehran Chamber of Commerce, Industries, Mines and Agriculture, said recently.
Also known as necessity or basic goods, essential goods are products consumers will buy, regardless of changes in income levels.
Other essential goods imported during the five-month period include 2.94 million tons of corn (down 10.5%), 1.68 million tons of soybeans (down 20.6%), 629,880 tons of barley (down 64.5%), 520,386 tons of sugar (down 13.8%), 500,643 tons of edible vegetable oil (down 51.4%) and 141,817 tons of rice (down 2.3%), the news portal of the Ministry of Roads and Urban Development reported.
Top three ports of entry for the above-mentioned essential goods during the period were Imam Khomeini Port of Khuzestan Province, Amirabad Port of Mazandaran Province and Shahid Rajaee Port located in Hormozgan Province.
The lion’s share of Iran’s demand for livestock feed raw material and grains are imported through Imam Khomeini Port, which is Iran’s second busiest port after Shahid Rajaee in Hormozgan Province. It boasts 40 wharfs, 140 kilometers of railroads within its premises and the latest loading and unloading facilities.
Import Subsidy Overhaul
The government of President Ebrahim Raisi decided in May to overhaul the import subsidy system.
The move saw the abolition of the controversial practice of allocating cheap dollars at the rate of 42,000 rials per dollar, locally known as the Preferential Foreign Currency, to import essential goods, including corn, soymeal, unprocessed oil, oilseeds and barley, in addition to wheat, flour and medicine.
The market value of the dollar is around 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 reform.
In his speech, Raisi emphasized that the removal of cheap dollar allocation will not lead to a price rise in wheat, flour and medicine. However, the move led to a dramatic rise in the prices of essential goods. In fact, the prices of all commodities and services have also risen suddenly in a ripple effect.
Latest data released by the Statistical Center of Iran show the Consumer Price Index of “food and beverages” stood at 790.9 in the fifth month of the current Iranian year (July 23-Aug. 22) to register a staggering 81.2% year-on-year rise.
The group’s annualized and monthly inflation rates reached 57.4% and 1.4% respectively.
SCI’s review of different food products’ price changes show a dramatic rise compared with the year before.
For example, compared with the same month of the previous year, the retail prices of vegetable oil increased by 314.6%, registering the highest year-on-year price rise.
