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Saffron: market plunges into recession

June 16, 2020 9:01 AM, Der AUDITOR
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TEHRAN. Restrictions on air travel, market closures and sluggish demand – the coronavirus has plunged the saffron market in Iran into a deep recession. The market mainly depends on exports, which have, however, hit shockingly low figures.

Possible supply glut

As much as 85% of production are exported. Problem is that these exports nearly exclusively depend on air travel, which is still largely restricted. Due to the limited number of flights, transportation costs have also exploded. Last year’s exports generated around USD 275 million. This year the outlook is, however, rather bleak as exports have nearly stalled since March. Market players reckon that export may not have even reached 30 metric tonnes in March till May. China currently features as the main export destination.

Hope is that airlines will relaunch travel in June and revive the export market. Problem, however, is that overseas demand is largely subdued. Market players are, in addition, highly concerned over a possible supply glut in 2020/2021. Although there still is time for demand to revive since harvesting starts in October, production is currently projected rise by 15% to 575 metric tonnes. This would bring total supplies up to 700 metric tonnes.

Surprisingly stable prices

Producers are also confronted with problems in the domestic market since large souvenir markets, as for instance in Mashad, are closed. Domestic consumption is also said to be low. Traders, nevertheless, report surprisingly stable prices for Poushal and All Red Sargol, which have even risen nominally over the last two weeks. By contrast, the prices for Bunch and Negin saffron have declined notably, which is also due to the devaluation of the Iranian rial.

 

Saffron, premium quality, Iran

Type

EUR/kg

Bunch, Dasteh

410

Poushal

473

All Red Sargol

511

Negin

618

FOB Iran

 

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price chart, saffron, dried, Negin, Iran
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