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Country Briefs

  Iran (Islamic Republic of)

Reference Date: 04-July-2018

FOOD SECURITY SNAPSHOT

  1. Above-average wheat crop output forecast in 2018

  2. Average cereal import requirements forecasted in 2018/19

  3. Food inflation increased compared to previous month, but lower than a year ago

Above-average 2018 wheat crop forecasted

Harvesting of the 2018 winter wheat started in early June and will continue until mid‑July. Good rainfall from March to May eased soil moisture deficits accumulated during an extended dry spell that affected the country since October 2017. Reports indicate that, in southern Fars and Esfahan provinces, the cereal area has been reduced with respect to 2017. Higher yields in the rest of the country are expected to offset the decreases in the southern planting areas, resulting in a national harvest of about 20 million tonnes of cereals, similar to last year and about 10 percent above average. Preliminary official estimates include 13.4 million tonnes of wheat.

The Government in the current season intends to locally purchase 10.4 million tonnes of wheat to decrease the reliance on imported wheat. As of early June 2018, about 3 million tonnes were purchased since the beginning of the wheat purchasing season. In 2017, the Government purchased about 9 million tonnes of wheat out of 11 million tonnes planned. The Government guaranteed that the purchase prices for the 2018 crop remained unchanged from their 2017 levels: IRR 13 000 per kg (equivalent to USD 310 per tonne) of common wheat and IRR 13 300 per kg (USD 316 per tonne) of durum wheat, above the prevailing international prices of about USD 250 per tonne. A revision of the guaranteed purchase prices is expected before the start of the new cropping season in autumn.

Wheat and barley are the main crops cultivated in the country. Wheat is the dominant cereal crop accounting for almost 70 percent of the aggregate cereal production. Irrigated wheat covers only one‑third of the total wheat area, thus the bulk of the wheat crop depends on rainfall. Most of the rainfed wheat crop is concentrated in the west and northwestern regions of the country. Small amounts of rice and maize are also produced in the country.

Average cereal import requirement forecasted

Cereal import requirements in 2018/19 (April/March) are forecast at an average level of 12.4 million tonnes, including maize (7.5 million tonnes), wheat (1 million tonnes), barley (2.5 million tonnes) and rice (1.4 million tonnes), about 10 percent above last year’s low level.

In March 2018, an import deal between the Islamic Republic of Iran and the Russian Federation was signed to import up to 1 million tonnes of wheat per year over the next five years to increase the utilization of the Iranian wheat flour mills and, consequently, expand the Iranian exports of flour. Iranian private millers are not allowed to use domestic wheat destined to supply the domestic market for flour exports.

Food inflation increasing compared to previous month, but lower than a year ago

The latest official information available from the Central Bank indicates that, in the period from 20 April 2017 to 20 May 2018 (Ordibehesht 1397), the food and beverages price inflation index stood at 8.4 percent, on a yearly basis, driven by increases in the prices of meat and dairy products. By comparison, in the previous month, the food price inflation stood at 5 percent and at the same time a year ago, it exceeded 15 percent on a year‑on‑year basis.

In April 2018, the Central Bank decided to implement a long‑awaited currency reform, unifying the official and open market exchange rates. Following the reform, the official exchange rate increased from about IRR 37 000 per USD to IRR 42 000 per USD.

Disclaimer: The designations employed and the presentation of material in this information product do not imply the expression of any opinion whatsoever on the part of FAO concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries.