The Iranian government has purchased 7.15 million tons of wheat worth 827.86 trillion rials ($2.6 billion) domestically from the beginning of the harvest season on March 24 till Sept. 14, registering a 58% rise in tonnage compared with the similar period of last year, according to CEO of the Government Trading Corporation.
“The value of this year’s purchases exceeds that of the years 2017-21, which stood at an aggregate of 812.03 trillion rials [$2.55 billion],” Saeed Rad was also quoted as saying by ILNA.
This year, guaranteed purchases started from the provinces of Sistan-Baluchestan, Kerman and Khuzestan — all in southern Iran.
The government bought around 4.52 million tons of the grain in the last Iranian year (March 2021-22), according to Rad.
GTC, he added, is purchasing the grain at 115,000 rials (about $0.36) per kilo from domestic farmers this year, which is twice the price set by the government for guaranteed wheat prices last year.
The Government Trading Corporation, 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.
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.
Private Sector Wheat Import After Seven Years
The private sector has been allowed to place orders for wheat imports as of Aug. 23. The government agreed to take the measure after seven years of banning wheat imports by private traders, according to the head of the Agriculture and Food Processing Commission of Tehran Chamber of Commerce, Industries, Mines and Agriculture.
“In a meeting with first vice president [Mohammad Mokhber] around three months ago, we made our request for the private sector to be allowed to be active in the field of wheat imports. Fortunately, our request was accepted and the government’s Economic Council agreed to give us the permit. Now a directive allowing private businesses to import different types of wheat has been communicated to provinces across the country,” Kaveh Zargaran was also quoted as saying by the news portal of TCCIM earlier this month.
The official added that domestic wheat harvest ends in September, so imports of the grain cannot hurt local farmers at this time.
“The government has announced that so far it has purchased around 7 million tons of wheat from local farmers as part of its guaranteed purchase plan. Since domestic demand is close to 12 million tons per year, we still need 5 million tons of the staple grain to meet our needs. Part of this deficit has already been imported by the Government Trading Corporation, but there is still room for the private sector to import,” he said.
Zargaran noted that given the global wheat prices, which are currently relatively high, and the abundance of local production for now, import doesn’t seem to be a good idea at present, yet we are planning to import during the second half of the year, which starts on Sept. 23.
“Right now, imports of durum wheat, or very high quality wheat, which is used for making specific products or mixed with other types of wheat, can be profitable for the private sector as well as bakery businesses and the industry.”
Last year (March 20221-22), 7.07 million tons of the staple grain were imported into the country based on figures released by the Islamic Republic of Iran Customs Administration and the government bought around 4.52 million tons of wheat.
The government says it has doubled the prices of wheat it buys from farmers compared to last year.
FAO Forecasts
The Food and Agriculture Organization of the United Nations expects Iran’s wheat production to increase to 13 million tons in 2022 from an estimated 9 million tons in 2021, to register more than a 44% rise.
In its biannual report on global food markets, FAO has put the 2019-20 average production of wheat in Iran at 14.3 million tons.
Because of the projected rise in production, imports are forecast to decline from 7.9 million tons to 3.4 million tons.
The 2018-19 to 2020-21 average import has been put at 1.6 million tons.
Wheat consumption is forecast to slightly increase to 16.4 million tons in 2022-23 from 16.2 million tons in 2021-22.
The 2018-19 to 2020-21 average consumption has been put at 15.8 million tons.
According to FAO, Iran’s wheat stocks in the year to 2023 is forecast to decline to 6.9 million tons from an estimated 7 million tons in 2022. The average stocks during the 2019-21 period has been put at 6.4 million tons.
Per capita wheat consumption is forecast to slightly increase to 169.7 kilograms per year in 2022-23 from an estimated 169.4 kilograms per year in 2021-22.
The 2018-19 to 2020-21 average per capita has been put at 168.7 kilograms per year.
