A popular economist from Iran, Hassan Rezaeipour, recently stated that instead of selling wheat at throwaway prices in the local markets, producers of wheat are planning to export it to the neighboring countries that are present along the Persian Gulf. This would help the wheat producers get a better price for their produce.
The main intention behind these exports is the volatility that exists in the local exchange markets of Iran. Also, the currency of Iran, the Rial, has depreciated greatly over the past few months and wheat producers are unhappy with the returns they are gaining upon selling the wheat.
Also, there is a huge price gap between the price of wheat in the domestic markets of Iran and other international markets. Due to this, the producers of wheat prefer to export their produce rather than selling it at lower prices in the domestic market. Hassan Rezaeipour, when speaking to Pars Herald, opined that the Government of Iran should intervene into this matter.
He also explained the reason why wheat producers plan on exporting wheat. It is mainly due to the supply and demand gap that exists in the local markets. Due to the abundant supply of wheat, the price of wheat has gone down to a great extent in the domestic markets. This is in contrast to the prevailing scenario, as Iran is known to have been importing wheat from India and Pakistan.
Still, farmers in Iran are exporting wheat to other countries. There are also reports that suggest that wheat is smuggled into Iraq. This is because the Government price for wheat in Iran is 6500 Rial per kilogram, whereas several businessmen in Iraq offer far better rates to the farmers and the rate offered is generally as high as 10,000 Rial per kilogram, due to which farmers are tempted to sell it to Iraq.
Iran has a high level of wheat consumption. The total consumption is 8 million tons per annum, and the per capita consumption of wheat is 8.7 kilograms of bread each month and a whopping 104 kilograms of wheat every year.