August 06, 2021
Bad weather and continuing drought are expected to halve Iran’s wheat production this year, forcing the country to become a huge importer again and making mincemeat of its plans to become self-sufficient in wheat.
The drought is nothing new, but extreme cold at the start of the crop year at Now Ruz has added to the pressure on wheat farmers, according to the deputy head of the National Wheat Farmers Empowerment Foundation, Aliqoli Imani.
Last year, Iran produced 12 million tons of wheat, a normal output. But Imani said output this year was expected to be only six million tons.
Majlis Deputy Mohammad-Javad Askari, the vice chair of the Majlis Agriculture Committee, said officials were planning on imports of 5-to-7 million tons this year.
That would put Iran in the list of the top 10 importers. Last year, Iran imported 2 million tons of wheat and ranked 29th on the list of importers. Egypt was the Number One importer last year, buying 13.2 million tons. Egypt is normally the world’s largest importer each year.
The halving of production is a huge blow to the Islamic Republic, which has made self-sufficiency in food, especially wheat, a major goal since the revolution. Self-sufficiency or autarky is the ideological lodestar of the regime, which believes that dependency on imports will make Iran dependent on foreigners who will then use that as leverage to pressure Iran to bow to their demands.
However, the Islamic Republic has had to import wheat in all but two years since the revolution 42 years ago and has never charged that any wheat exporter has tried to pressure the country. The reality is that there are so many wheat exporters around the world that no exporters could pressure any importer. The biggest wheat exporter by far is Russia, followed by the United States, Canada and Australia.
The government earlier this year boosted its guaranteed purchase price for Iranian-grown wheat by an astounding 100 percent, from 50,000 rials (29 cents) per kilo to 100,000. The government in recent years has been quite parsimonious with its purchasing price, so the huge jump this year suggests it is quite worried about having enough wheat on hand. The government announced the doubling several weeks ago when it was still predicting publicly that Iran would grow 12 million tons.
One reason for the higher price is that when the price of wheat is lower than the cost of animal feed, farmers start to dole out the wheat to their animals. And the price of barley, a conventional animal feed in Iran, has soared this spring.
Another likely reason for the high price is that the government is low on foreign exchange with which to import wheat, so raising the price it will pay local farmers guarantees they will sell more wheat to the government and reduce its foreign exchange needs.
