Dilemma of offering wheat via Iran Mercantile Exchange
Tehran, Iran, Feb.13
The guaranteed wheat purchasing process is one of the most complex processes in the Iranian economy and it affects a large part of society, and it is said that the amount of subsidies allocated to wheat should be enough to adjust the existing inflationary pressures.
The parliamentary research center said the government will face a deficit of nearly $382 billion in next year's budget for the guaranteed purchase of wheat from local farmers and providing subsidized bread subsidies.
Wheat is one of the strategic food products, so it should always be supported by the government, while wheat must be introduced, under special management measures, at the Iran Mercantile Exchange.
But it seems that wheat supply on the stock exchange has stopped.
A stock market expert said that the latest wheat supply at the stock exchange was for $0.21 per kilo, while guaranteed purchase price is $0.33 per kilo,” Hassan Rezaeipour, deputy director of the Agricultural Development Brokerage Company told Trend.
“The Mercantile Exchange price for wheat was certainly not cost-effective for the producer,” he said.
“The volume of supply of wheat by the Government Trading Corporation of Iran has dropped during the summer this year (Started on March 21, 2018), so this led to increase in the volume of demand on the stock exchange,” Rezaeipour explained.
The Government Trading Corporation of Iran (GTC) is affiliated with the Ministry of Agriculture Jihad of the Islamic Republic of Iran. Its main goals are essential programming in the course of presentation of trading services & facilities related to necessary, crucial & basic goods, & acceleration in providing services and accomplishing entrusted tasks, and expanding these services all over the country, in order to improve distribution affairs, storage, packaging in the direction of making the consumers satisfied and encouraging private section to invest in trading affairs.
“The drops of supply and price fluctuations at the stock exchanges and the free market also made the customers dissatisfied with the low volume of supply, and the Government Trading Corporation of Iran (GTC) actually left the stock market,” said Rezaeipour.
“The major wheat supply via the Mercantile Exchange was for industrial propose,” he added.
In September, the head of Iran’s Budget and Planning Organization Mohammad Baqer Nobakht said in a tweet that near 10 million tons of wheat are estimated to be purchased at guaranteed prices by the end of this year’s harvest season, 10 percent more than last year’s figure.
Based on the plans implemented by the Government Trading Corporation of Iran, the country is self-sufficient in production of wheat and level of wheat imports will remain at zero during the present Iranian calendar year (ends on March 20, 2019), as it did in the preceding year.