Raisins: Price increases

Mundus-Agri:  As spraying costs have surged in recent months traders in Iran anticipate a threefold rise in the prices for grapes and raisins. Exporters are already having difficulties competing with Turkey.

Surge in production costs

They, in fact, complain that Turkey deliberately keeps export prices low. While it has been possible for the industry to compete with Turkey by keeping prime costs relatively low by attracting foreign investors and producing and processing raisins in Uzbekistan, costs are now on the rise. Not only have spraying costs risen threefold since last year, but processing is also very expensive as the costs for sulfur, labor and even oil are very high in Iran. Effectiveness is, in addition, hampered by a relatively high 18% proportion of waste in harvesting and processing grapes, a lack of conversion factories and the interference of dealers in the market.

The climate change also has a huge impact on exports. Last year’s severe summer drought not only caused production to decline sharply but also capped supplies and reduced quality. High prices deterred buyers and prompted Iran’s raisin exports to decline by more than 50% between January and July as opposed to the same period last year. Exports in fact only reached 53,161 mt worth USD 72.97 million this year, whereas Iran shipped 112,083 mt of raisins worth USD 148.94 million overseas in January-July 2021. 

Nuclear Deal weighs on prices

Political factors will also continue to impact market prices. While hopes over a possible revival of the Nuclear Deal, the Joint Comprehensive Plan of Action (JCPOA), initially prompted the Iranian rial to gain in value after the EU issued a proposal for the United States and Iran to return to the deal in August, things have now changed. Issue is Iran’s recent demand that the International Atomic Energy Agency (IAEA) should effectively stop investigating undeclared uranium traces found in several sites within the country. At present it is highly unlikely that an agreement will be reached in the near future. This prompted the Iranian rial to lose against the euro and US dollar last week and the prices for Iranian raisins to decline.