Economy, Domestic Economy

Rumors Cause Saffron Prices to Spike

Rumors Cause Saffron Prices to SpikeRumors Cause Saffron Prices to Spike

Recently the price of saffron skyrocketed by about 20 million rials ($600) per kg to reach 70 million rials. The primary reason behind this price hike does not seem to have been lack of supply or high demand, but rumors spread by insider traders, Eghtesad News reported.  

Gholamreza Miri, head of the Exporters Association of Iranian Saffron, pointed out that over the past 40 days, 500,000 rials (16$) were added daily to the price of saffron.

Astonished by this volatility in an otherwise mature market, Ali Hosseini, a member of the EAIS, said, “Unfortunately some opportunists are looking to make huge profits by disturbing the market and spreading false news that the supply of saffron is limited.”

Hosseini claimed that currently Iran’s supply of saffron is higher than domestic needs and exports combined.

 “In [the Iranian year] 1392 (ended March 2014) about 300 tons, and in 1393 about 200 tons of saffron were produced in the country,” he said adding that in 2014 only about 140 tons were exported. “We had saffron in excess of both consumption and export demand.”

He said saffron exporters are still exporting last year’s crop.

“We expect this year’s harvest to bring annual production to 300 tons,” he added.

Ruling out rumors about shortage of saffron in the country, he went on to say, “These figures indicate that saffron production in Iran is high.”

So far, it is unclear what individuals or companies have been behind this insider rally. The government is expected to start reviewing this adverse market activity in one of Iran’s most prestigious markets.