reflecting the surging cost of wheat, which is, in turn, partly the result of the collapse in the value of the rial earlier this year.
Here are the new and old rial prices for the four major bread varieties:
Bread Old New Change
Sangak 5000 6000 20%
Barbari 3750 5000 33%
Taftun 2500 3000 20%
Lavash 1250 1600 28%
The official price changes were announced by Nematollah Torki, the deputy governor general of Tehran province for planning. The new prices were announced Saturday night and took effect Sunday morning.
Bread prices were tripled in December 2010 when subsidies were lifted. They were raised again by about a quarter last April to the levels shown above in the “old” column.
The Sunday hike in Tehran had been expected as prices have surged in other provinces in the last two weeks. Some bakers in Tehran hiked prices unilaterally last week. The governor general’s office forbade that; it was reportedly having a major internal debate over how much to boost bread prices.
Reuters quoted a French grain exporter as saying Iranian officials had told him they had already imported 3 million tons of wheat and were looking to import another 2 million tons in the coming weeks. Five million tons would make Iran one of the world’s largest wheat importers this year.
Iran is understood to be paying premium prices to get the wheat it needs. Although none of the UN, US or EU sanctions target food imports by Iran, the various banking restrictions imposed by the US and EU make it harder for Iran to import anything and thus add to costs.
In fact, Reuters quoted one grain trader in Europe as saying he doubts the 3 million tons of wheat ordered had actually been delivered owing to payment problems. “Deliveries are not working that well,” he said.
Earlier this year, when the banking restrictions first started to bite, about a dozen shiploads of fodder corn for animals turned around and never unloaded in Iran because Iran could not arrange payments. As a result, Iran is believed to have used wheat intended for bread to feed farm animals for awhile. That means Iran now must import more wheat than originally anticipated this year.
The wheat crop is expected to be within normal range this year. Many traders believe Iran is trying to buy a lot of wheat now in order to stock up just in case the West does impose sanctions on food sales to Iran. However, there is no push for any food sanctions, not even among the most ardent advocates of strangling the Iranian economy among US conservatives.
In non-drought years, Iran produces 13 million to 15 million tons of wheat a year. Iran harvested 13.5 million tons in 2010 and again in 2011, and the UN Food and Agricultural Organization (FAO) recently projected this year’s harvest at a little less. This year’s rolling harvest began in the south early in May and will continue to September.
As for imports, Iran bought 6 million tons of wheat in 2008, a bad drought year, making it the world’s largest wheat importer that year. It imported 1.2 million tons in 2010 and 1.3 million in 2011. If it does buy 5 million tons this year, it would be a huge but not record-breaking buy.
However, it would still make mincemeat of Iran’s repeated announcements dating back to 2004 that it had become self-sufficient in wheat after 45 years of dependency on imports. Iran did not, in fact, import any wheat in 2005, but it has imported wheat in every year since then.