Page 20 - IRANRptAug22

hadn't been paid in months.
Many of the protests have been met with aggressive security crackdowns. According to SCI inflation report, price growth in food, beverages and tobacco grew by 32.2 pp to 81.6% in June, while nonfood goods and services prices moved up by 2.8 pp to 36.8%.
A dramatic rise in the price of flour in Iran is reportedly leading to concerns that the authorities' recent decision to halt subsidies for imported wheat could lead to social unrest.
The government ended subsidies for imported wheat on May 1. The cost of flour subsequently soared by around 500%. The price is expected to rise further, meaning even more pain for consumers dealing with rising bread, pasta and other flour-based product price rises.
RFE/RL reported on May 6 that the Student Basij, a subgrouping of the Basij militia that is a branch of Iran's Islamic Revolutionary Guard Corps (IRGC), has issued a stark warning to hardline President Ebrahim Raisi.
The move to end subsidies was a "serious shock" to trades and industries that depended on subsidised wheat and flour, added the statement, which also advised the government to not make such decisions without taking into account public opinion first.
Inflation in Iran—the most sanctioned country in the world prior to Russia facing waves of sanctions in response to its invasion of Ukraine—is officially running at around 40%. It is thought to be even higher for food. Iranian media have reported that the price of rice, which has recently moved up by around 130%, has already driven many consumers to alternatives like bread. Bean prices, meanwhile, are said to be up by around 120% and cooking oil and sugar prices have also gone up.
Drought-hit Iran has become increasingly reliant on imported wheat. Mohammad-Reza Mortazavi, head of Iran's Flour Producers Association, said on May 2 that the country was more dependent than ever on foreign grain. He said it would have to import more than 20mn tonnes of grain in 2022. With global wheat prices soaring amid impacts of the Ukraine war—Ukraine has millions of tonnes of wheat unable to leave ports due to Russia’s blockade—sourcing enough of the commodity at reasonable prices has become a huge task.
The Iranian state has spent roughly $8bn a year since 2018 on subsidising food imports to offset inflationary pressures on the populace; however, in recent months the accumulated stresses caused by US sanctions—including the blocking of Tehran’s assets abroad by the threat of secondary sanctions aimed at international financial system players—have left the government’s coffers decidedly bare.
If the cheap dollar rate was entirely eliminated, prices across the country in the wholesale market could increase by five to six times.
20 IRAN Country Report August 2022 www.intellinews.com