Food Inflation Rates Surveyed

EghtesadOnline: The Statistical Center of Iran’s latest report surveys the price changes in 53 food items during the month ending Aug. 22.

News ID: ۷۸۶۹۳۷

04 September 2021

The biggest month-on-month price rise for a food item in urban areas during the month under review was recorded for carrots with 70.5%, such that a kilogram of carrot was sold at 173,037 rials (63 cents).

The second and third biggest month-on-month price increase during the period under review was registered by oranges with 39.5% and mushrooms with 17.4%, the Statistical Center of Iran reported.

A kilogram of oranges was sold at 191,673 rials (70 cents) and a kilogram of mushrooms went for 426,348 rials ($1.56).

Nine out of 53 food items examined by SCI this month saw a price decline in the fifth Iranian month (July 23-Aug. 22) compared with the month before. Lime with 14.1%, watermelon with 9.8% and peach with 5.6% were three items with highest month-on-month deflations. A kilogram of lime was sold at 202,999 rials (74 cents), a kilogram of watermelon cost 47,854 rials (17 cents) and a kilogram of peach went for 238,076 rials (87 cents).

YOY Review

When compared with the same month of the year before, the retail prices for carrots during the month increased by 255.4%, registering the highest year-on-year price rise for a food item. A kilogram of carrots was sold at 173,037 rials (63 cents).

The second and third biggest year-on-year price hikes in the same month among food items were registered for butter with 121.5% and tomato with 119.3%. One hundred grams of butter was sold at 107,779 rials (39 cents) and a kilogram of tomato went for 81,828 rials (30 cents).

A year-on-year price deflation was registered for one item: oranges with a 4% year-on-year deflation. A kilogram of orange was sold at 191,673 rials (70 cents).

Carrot Case

Saeed Rad, the CEO of Tehran Municipality’s Grocery Store Centers, says up until a couple of months ago, domestic demand for carrot stood at 5 tons to 10 tons per day.

“Yet, due to rumors that carrots and carrot juice have significant effects on treating Covid-19 patients, demand has surged, increasing prices to unreasonable levels. We have tried to lower the prices again and supply is being carried out as usual, but grocery centers run out of the product very quickly due to increased demand,” he added.

The rise in the number of Covid-19 cases has led to a threefold rise in carrot demand, while domestic supply has seen a fall in recent weeks, the head of the board at Grocery Store Owners Union said recently.

“Covid-19 patients have taken to consume fresh fruit and vegetable juice, carrot juice in particular. Carrots supplied to the market at present are produced in the south of the country,” Mostafa Darayinejad was quoted as saying by ILNA.

The official said there is a shortage of carrots in the market since harvest season in the south is coming to an end, adding that the supply issue will be solved within the next few days when harvest begins in central provinces like Isfahan.

“Carrot prices have increased due to the imbalance in supply and demand. We hope prices go back to normal when new yields are distributed across the country,” he added.

A total of 550,000 tons of carrots are estimated to be produced on over 12,000 hectares of farms across the country in the current Iranian year (started March 21), to register a 10% rise compared with last year, according to the director general of Vegetable and Fodder Production Affairs Bureau of Agriculture Ministry.

“Last year [March 2020-21], close to 11,000 hectares of farmland went under carrot cultivation and yields amounted to around 500,000 tons. The figure showed an 8% increase compared with the year before,” Hossein Asghari was quoted as saying by ILNA.

The official noted that the southern Khuzestan Province, southwestern Fars Province, western Lorestan Province and northeastern East Azarbaijan Province are Iran’s carrot production hubs.

“Lately, Russia and Iraq have shown more interest in importing Iranian carrots. Not only does Iran have the potential and capacity to produce enough of the vegetable to meet its domestic demand, but it is also able to supply the need of other countries.”

Overall Inflation at Record High

The annualized inflation rate in Iran has reached a record high.

Latest data released by SCI show the average goods and services Consumer Price Index in the 12-month period ending Aug. 22, which marks the end of the fifth Iranian month of fiscal 2021-22, increased by 45.2% compared with the corresponding period of the year before.

The rate is an all-time high since the fiscal 2017-18 when SCI started recording the earliest statistics on CPI in Iran.

SCI had put the average annual inflation rate for the preceding Iranian month, which ended on July 22, at 44.2%.

Consumer inflation for the month under review (July 23-Aug. 22) registered an increase of 43.2% compared with the similar month of the previous Iranian year. The year-on-year inflation of the month ending July 22 was 43.6%.

The overall CPI (using the Iranian year to March 2017 as the base year) stood at 337.8 for the month under review, indicating a 3.2% rise compared with the previous month. Month-on-month consumer inflation was 3.5% for the preceding month.

SCI put average inflation for urban and rural areas at 44.5% and 48.7%, respectively.

CPI registered a year-on-year increase of 42.4% for urban areas and 47.7% for rural areas in the month ending Aug. 22.

The overall CPI reached 334.1 for urban households and 358.1 for rural households, indicating a month-on-month growth of 3.2% for each.

The highest and lowest monthly growth in the index among 12 groups of the basket of consumer goods and services purchased by households in the Iranian month ending Aug. 22 was recorded for “Food and Beverages” group with 4.6% and “Communications” and “Education” groups with 1% each.

The highest year-on-year inflation in the month under review was posted for “Hotels and Restaurants” with 63.1% while the lowest YOY inflation was registered for “Communications” with 7.3%.

The highest and lowest annualized inflation was registered for “Transportation” with 61.3% and “Communications” with 17.8%.

With a coefficient of 26.64%, the CPI of “Food and Beverages” for all Iranian households stood at 436.5 in the month ending Aug. 22, indicating a 4.6% increase compared with the month before. The “Food and Beverage” index registered a year-on-year increase of 59.2%.

The CPI of the group increased by 57.4% in the 12-month period ending Aug. 22 compared with last year’s corresponding period.