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Iran announces conditional rise in guaranteed purchase price of wheat

Iran will purchase wheat at a price of $0.43 per kg from local farmers in the next harvesting season.

Iran’s agriculture minister has announced a conditional increase in the annual guaranteed purchase price (GPP) of domestically-supplied wheat.

Seyyed Javad Sadatinejad said on Thursday that the government will purchase wheat from local farmers at a GPP of 130,000 rials ($0.43) per kilogram in the harvesting season that will begin in early April 2022.

He said the price will include a sum of 115,000 rials per kg for the wheat purchased from the farmers in addition to a payment of 15,000 per kg in “cultivation subsidy” paid for the crop harvested from each hectare of land.

Iran’s GPP for wheat is normally announced in September to encourage farmers to allocate more lands to wheat cultivation.

However, the government decided to double the price in March this year to 105,000 rials plus 10,000 rials per kg in supportive payment after international grain prices soared because of a war between Russia and Ukraine.

That comes as global prices dropped in July after Ukraine and Russia reached an agreement to allow grain shipments to sail from several Black Sea ports.

Sadatinejad said the Iranian government had spent 820 trillion rials ($2.73 billion) on purchase of more than 7 million metric tons (mt) of wheat from Iranian farmers over the four months to late July.

He said major increase in wheat GPP this year had caused the dry-land farming area allocated to the crop in the Iran to increase by 1.5 million hectares, as he estimated that some five million hectares of dry-land fields will be cultivated with wheat for the next harvesting season.

The minister said wheat crop purchase from domestic famers in Iran is expected to increase to nearly 9 million mt next year, adding that current Iranian wheat inventories are at more than 11 million mt.


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