Gov’t Wheat Purchases Up 28%

The government bought more than 5 million tons of wheat from local farmers in the first 100 days of the current Iranian year (started March 21) under the so-called “guaranteed purchase” project.
According to the Agriculture Ministry, the volume of the crop, purchased from 309 farmers during the period shows a 28% year-on-year increase, IRNA reported.
The report added that the government has so far paid more than 67% of the farmers.
According to the United States Department of Agriculture, Iran’s wheat output stood at 12 million tons in the 2021-22 crop year and rose to 13.2 million tons in 2022-23. It is projected to hit 14.5 million tons in 2023-24 to register a 9.85% year-on-year rise, USDA said in its May update.
The report estimates that 6.2 million hectares are under wheat cultivation in Iran.
The Government Trading Corporation, a subsidiary of Iran’s Agriculture Ministry, reportedly purchased several hundred thousand tons of Russian milling wheat for April and May shipment. The tender caught most of the market by surprise, especially with Iran’s wheat harvest beginning in May, UkrAgroConsult reported.
The recent deal is believed to be a government-to-government agreement that will most likely be executed by a select band of well-connected Russian exporters.
Food security is a priority for the Iranian government. Drought drastically decreased domestic production in the 2021 harvest, culminating in record wheat imports of 8 million tons in the year to June 2022.
In Iran’s crop year ending August 2022, the Agriculture Ministry reported an increase of 45% in wheat production compared to the previous season. A far more favorable growing season, a 50% fall in the subsidized price for fertilizer and pesticides, and an increase in cultivation area following a 130% increase in the government’s guaranteed purchase price were the primary contributing factors.
Wheat is considered a staple in Iran and the government purchases it from farmers every crop year to build up its reserves and regulate market supply over time. 
Despite the significant jump in production, wheat imports are still expected to be around 5.5 million tons in the current marketing year, assuming the hard currency issues are resolved. In the five seasons prior to 2021-22, wheat imports averaged just 1.2 million tons annually.
Iran was Russia’s third biggest wheat customer in 2022, importing a total of 1.8 million tons, down 55% compared to 2021 shipments of 4 million tons. The biggest importer of Russian wheat last year was Turkey with 4 million tons, down 5.2%, followed by Egypt, which registered a 12.6% rise to 3.5 million tons. 
Trailing Iran on the list was Saudi Arabia with 1.5 million tons, up 119%, and Algeria with 1 million tons, up 270%.