Page 5 - IRANRptJun22

40%. Prices for wheat-based, dairy and pasta products in Iran have been rising at a far faster rate.
Iran, the Middle East’s top wheat producer, is expected to see production drop 20% this year to 12mn tonnes, which is 17% below the 5-year average, according to Gro Intelligence. The country’s wheat-growing areas have experienced “severe” levels of drought since mid-2021.
The consumer price index (CPI) inflation figure released by the SCI was 42.4% in the 10th Persian month (ended January 20), a modest improvement on the 43.4% recorded in the 9th Persian month. Food, beverage and tobacco prices moved up 1.7% m/m, while services and non-food prices gained 2.7% m/m.
Social tensions in Iran have risen amid surging inflation, including steep hikes in food prices, and a series of strikes mounted by workers including teachers and bus drivers in Tehran. In the past year, the country has also been hit by protests over water shortages.
Protesting crowds consumed by grief and fury took to the streets of the southwestern Iranian city of Abadan in Khuzestan Province on May 24 as the death toll from the collapse of an unfinished 10-storey building mounted to 31. Many in Abadan are blaming city officials for the tragedy, with rumours of poor construction work that was given the go-ahead to cut costs.
Meanwhile, the Ukraine conflict has reportedly resulted in a surprising surge of trade flows from Europe to the East and South via Iran, which saw Iranian goods transit increase 52% in March and creates something of a political quandary for both the European Union and United States, as Iran, like Russia is also under significant US sanctions.
With sanctions still in place in an effort at keeping Iranian oil off world markets, Iran has been relying on China turning a blind eye to American demands to import substantial amounts of Iran’s crude on the grey market.
Iran's oil export volume is running at a level 40% higher than was seen a year ago, according to the National Iranian Oil Co (NIOC).
However, an estimated 40mn barrels of Iranian crude oil is currently stuck offshore in ports around Asia looking for a buyer. As prices of Russian crude have fallen in the weeks following Moscow’s invasion of Ukraine, more and more oil cargoes from Iran have found themselves without end destinations.
The National Iranian Oil Co. (NIOC) this week confirmed the signing of an investment deal with a foreign company for the development of the oil layer of the supergiant South Pars gas field. The Islamic Republic has expanded gas output significantly at South Pars in recent years and supplies are estimated to flow at an average of 850-950mn cubic metres per day, topping out at 1bn cubic metres.
Looking ahead, Iran can expect GDP growth of 3% this year and 2% in 2023, according to the latest projection of the IMF released in its spring World Economic Outlook update. Those rates would follow last year’s 4%, the Fund said.
5 IRAN Country Report June 2022 www.intellinews.com