Dried Fruit

Raisins: unsustainably low prices

May 27, 2020 12:06 PM, Der AUDITOR
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TEHRAN. The coronavirus crisis has not only stalled exports but has also given rise to a bizarre market situation with incredibly low prices for raisins in Iran. Quality is another problem. Traders in the country are convinced that drastic changes are needed.

Coronavirus highlights structural failures

One case in point is Khalilabad in the Khorasan Razavi province. The district is a production hub for quality grapes and for green raisins, which are also exported. Market prices are, however, so low that the farmers have refrained from selling their raisins and store them in traditional warehouses instead, which has a detrimental impact on quality. Estimates state that as much as 1,500 metric tonnes of raisins are still available for export, a figure that is far higher than the supplies that would normally be available for exports at this time of year. Production costs range higher than the current market prices, a problem which persists throughout Iran.

The low market prices are mainly attributed to the coronavirus crisis. This crisis has not only prompted a slowdown in exports but has also disrupted any plans of the rural cooperative organisations to step in and buy raisins form the producers to support the market. Now calls are being voiced to render the market more competitive by cutting production, focusing more on quality and improving organisational structures. Programmes are already underway to improve quality, but market players state that it will take at least another two years until the market will witness any impacts.

Controversial reference prices

The unsustainably low market prices in Iran have sparked some controversy in the international market over the last few weeks. Problem is that the prices offered by individual suppliers tend to range higher than the low market prices that are being promoted for reference. In addition, the devaluation of the Iranian rial has put a cap on prices in the export market. While the prices for sultanas have declined nominally by EUR 0.03 per kg to EUR 1.40 per kg over the last two weeks, an uptick in demand has driven up the prices for golden and for green raisins by EUR 0.13 per kg and EUR 0.09 per kg respectively.

 

Raisins, premium grade, Iran

Type

EUR/kg

Sundried

1.60

Sultanas

1.40

Golden

1.81

Green

2.02

FOB Iran

 

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