The government bought more than 4 million tons of wheat worth 480 trillion rials (over $1.5 billion) from local farmers from the beginning of the harvest season on March 24 to June 30, which shows a 28% growth in tonnage compared with the similar period of last year, says the head of National Wheat Farmers Foundation.
This year, guaranteed purchases started from the provinces of Sistan-Baluchestan, Kerman and Khuzestan, all in southern Iran.
“Wheat production is expected to reach 10 million tons by the end of the harvest season in September to register a 20% rise compared with last year’s output. The government is expected to purchase more than 6 million tons of the grain,” Ataollah Hashemi was also quoted as saying by the Young Journalists Club.
He noted that the government has doubled the prices of wheat it buys from farmers compared to last year.
According to the Islamic Republic of Iran Customs Administration, 7.07 million tons of wheat were imported in the last Iranian year (March 2021-22).
Over the past 30 years (March 1992-2022), Iran has imported 96.48 million tons of wheat worth $22.84 billion, according to the spokesperson of IRICA.
“The highest volume were imported in the fiscal 2014-15 with 7.43 million tons, 2021-22 with 7.07 million tons and 2001-2 with 6.77 million tons,” Rouhollah Latifi was also quoted as saying by ILNA.
The official noted that the lowest wheat import figure pertains to fiscal 2018-19 with only 360 tons.
During the same year, he added, wheat prices were the highest in the 30-year review with close to $0.70 for each kilogram while fiscal 1994-95 saw the lowest import price for the grain at nearly $0.10 per kilo.
Considered a staple in Iran, wheat is purchased annually by the government to build up its reserves and supply the market over time.
FAO Forecasts Iran’s Wheat Production to Rise 44%
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 a more than 44% rise.
In its biannual report on global food markets, FAO has put the 2019-2020 average production of wheat in Iran at 14.3 million tons.
Due to 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 volume during the 2019-2021 period has been put at 6.4 million tons.
Per capita wheat consumption is forecast to increase slightly 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.
Russia-Ukraine Conflict’s Impact
Some 20% of Iran’s wheat imports were from Ukraine during the last Iranian year (March 2021-22), according to the head of Iran’s National Wheat Farmers Foundation.
“The war between Ukraine and Russia, both among the main exporters of wheat in the world, has negatively impacted the international market of the grain. Moreover, global water shortage and drought have decreased wheat production across the world and right now the market is tumultuous,” Ataollah Hashemi was also quoted as saying by IRNA.
Ukraine, according to the official, accounts for 10 million tons or 10% of the global wheat exports and is the fifth biggest exporter of this staple grain but, based on the latest figures released by FAO, the country has lost more than half of its annual production this year.
“Because of US economic sanctions imposed on Iran, which already makes trade a challenge, our domestic market supply is more at risk in this situation,” he said.
“Russia and Ukraine have been traditional suppliers of the staple grain as well as corn and oilseeds to Iran for years. Other countries also buy part of their demand for wheat from the two countries now engaged in war. We import wheat from Germany, Australia, Canada and Argentina as well,” the head of Federation of Iranian Food Industries Associations, Mohammad Reza Mortazavi, was also quoted as saying by ILNA.
Noting that around this time of year up until May, prices of agricultural products rise, the official added that this year, the conflict between Ukraine and Russia has also impacted global prices, adding that wheat has seen the highest price rise in the past five years over the past six months.
“The war has also made other nations think about purchasing agricultural products and foodstuff, and store the commodities to ensure supply to their local markets. Whenever Egypt and China in particular start to fill up their reserves, the international market goes through another price hike. We hope that with the beginning of harvest season, prices will come down,” he said.
“We, like other states, need to import goods to fill in our strategic reserves, but I believe the best time to make purchases for this purpose are the four months after May that is June, July, August and September when harvest takes place and prices are moderate. Right now, global prices are at their highest level and if, hopefully, the war in Ukraine comes to an end and no other wars are waged, we can be optimistic that prices will decline in the international market.”
