37% Decline in Gov’t Wheat Purchases From Local Farmers

EghtesadOnline: The government has bought 4.7 million tons of wheat worth 230 quadrillion rials ($839 million) from farmers across the country, which show a 37% decline compared with last year’s guaranteed purchases over the similar period, the head of the National Wheat Farmers Foundation said on Friday.

News ID: ۷۸۶۹۷۱

07 September 2021

“Purchases are estimated to continue until late September. Yet, we are confident that the figure will not exceed 5 million tons by then. This means, strategic reserves aside, the government needs to import more than 3 million tons of the staple grain to meet the annual domestic demand,” Ataollah Hashemi was also quoted as saying by the Young Journalists Club.

This is while last year, 2 million tons were imported only to fill up the country’s strategic reserves, he added.

The official believes that although this year’s drought and water shortage had an impact, wheat production in general has not been hard hit, but farmers have not been selling the lion’s share of their yields to the government like in the past few years.

“There are a few reasons for this. The first one being the unreasonable guaranteed purchase price that does not cover production prices, leaving the farmers with little or no profit. Then there is the issue of livestock feed price hike, which makes wheat a suitable and relatively cheaper alternative to other kinds of feed. And lastly, wheat prices in the neighboring countries are higher, which has resulted in the smuggling of the crop beyond the borders,” he said.

Hashemi said the foundation estimates that 1.5 million tons of wheat have been smuggled out of Iran since the beginning of the harvest season.

Secretary of Majlis Agriculture Commission Zabihollah Azami was quoted as saying by IRNA a month ago that the government needs to import 6-8 million tons of the staple grain this year to meet the annual domestic demand.

Azami said the country’s strategic reserves are almost fully stocked, yet imports need to be made to meet future demands.

Aliqoli Imani, the deputy head of National Wheat Farmers Foundation, said earlier that wheat production has declined by 30% this year, the main reason being drought and low precipitation levels.

“We estimate that a total of 9 million tons of wheat will be produced across the country by the end of the crop year. This is while last year’s yields stood at 13 million tons,” he was quoted as saying by Fars News Agency.

“Our domestic demand currently stands at 11 million tons per year. Some 9 million tons of this supply the country’s bread requirements and the remaining 3 million are used in industries and pastry factories.”

Drought has inflicted 670 trillion rials ($2.48 billion) in losses on Iran’s agriculture sector since the beginning of the current crop year.

According to Mohammad Mousavi, an official with Agriculture Ministry, assessments carried out over 11.2 million hectares of farmlands in 30 provinces show 43% of the total losses were due to the decline in production of agronomic crops, 26% in horticultural production, 13% in fisheries and livestock, and 11% in forage crops.

“In addition, 4% of the total damage are to blame on challenges facing water transportation infrastructures, pools, pipes, aqueducts and springs, and 3% of losses can be attributed to water supply complications and the animal feed used by nomads,” he was quoted as saying by Mehr News Agency.

Iran is an arid country and the rise and fall in precipitation levels are characteristic of arid regions, which make predictions of domestic demand, import requirements and export capacities difficult.