Rapid inflation; 50% increase in bread prices

Election candidates all talk about the livelihood and welfare of the people, but amid the clamor of slogans, bread, oil, and sugar have quietly become more expensive. Alarm bells have also been raised about a shortage of rice. The Ministry of Food and Agriculture says the approved prices will be announced later.

Bread, liquid and solid oil, sugar, and several other staple items on people's tables have unexpectedly and surprisingly become more expensive, with a steep increase of over 30%.

The price of liquid oil has increased by 35%, solid oil by 30%, sugar by 30%, and bread by 50%, without prior notification or explanation.

While the price of bread has been rising for some time and government officials have not yet come to grips with it, the Consumer and Producers Protection Organization announced an increase in the price of liquid and solid oil starting Sunday, May 16.

None of the government officials or official departments have said anything about the high price of oil and its reasons, but the ILNA news agency, citing an “informed source” in the Ministry of Petroleum, wrote: “More than 95 percent of crude oil is imported, and the Organization for the Protection of the Rights of Producers and Consumers imposed this price increase because it could not put too much pressure on the production units.”

The issue has been attributed to a 140% increase in global oil prices during the coronavirus outbreak, increased demand, reduced warehouse stocks, and market uncertainty.

From scarcity to expensiveness

Explaining the high price of oil, Behshahr Industrial Group sent a letter to the Securities and Exchange Organization's Department of Supervision of Stock Exchange Issuers, stating that prices were set based on imports with a subsidized currency of 4,200 Tomans, and that any change in the preferential exchange rate for basic goods would affect the selling price of the product.

Crude soybean and palm oil has risen from 5,000 to 7,500 tomans, and crude sunflower oil has risen from 6,000 tomans to 9,000 tomans. Accordingly, crude and refined oil in various packaging has become 30 to 35 percent more expensive.

This is despite the fact that oil had become scarce during the end of the year and on the eve of Eid, and people were standing in line to purchase their necessities.

A source from the Ministry of Health also confirmed the increase in sugar prices, saying that today and tomorrow, one-kilogram packages of sugar will be sold for 15,000 tomans. Until now, each kilogram of sugar was 8,700 tomans in retail stores.

The ILNA news agency quoted him as saying: "The Ministry of Health did not allow the price of sugar to increase, but now the reserves have decreased and it cannot be distributed at low prices, so it has been decided to increase the price of sugar."

Rice market on the verge of shortage

The secretary of the Rice Importers Association expressed concern about the problems with rice supply amid the election hype, saying that imported rice reserves will only last for another three months.

Masih Keshavarz, a farmer, has announced that domestic production has also decreased due to the ongoing drought. He estimates the country's current reserves at 100,000 to 150,000 tons and warns that this amount will be exhausted in the next two to three months.

Bread; floating rates

Bread has become more expensive in various provinces for the past two weeks, but official institutions have been denying the issue until a day ago. On Sunday, May 16, the head of the Karaj Bakers Union said in his first official statement: "It has been approved that the price of all types of bread will increase by about 50 percent."

However, at the same time, the deputy coordinator of economic affairs for the Alborz governorate has called any increase in the price of bread in this province illegal and threatened that violators will be dealt with.

While citizens are reporting on social media with photos and evidence of the jump in bread prices in Tehran, no official announcement has been made in this regard yet, and the approved prices are not clear.

A user wrote on Twitter: "While we were all busy with worthless election news, people's backs broke, bread became more expensive. Of course, many food items are also silently increasing in price in a stepwise manner like last year."

The head of the Tehran Province Food Safety Organization justified the issue as follows: "Due to the sensitivities towards Tehran Province and its centrality, announcing new prices for bread has always been coordinated with government authorities."

The Deputy Minister of Food Safety also said: "The new price of bread has been expertly determined and its review process has been completed by the Governor's Office and the Flour and Bread Council, but the price increase is subject to coordination with the Governor's Office and officials from the Ministry of Interior and the Ministry of Food Safety."

Eshaq Jahangiri, Hassan Rouhani’s first vice president, spoke with tears in his eyes about the poverty and discrimination of the people when he registered to run for president. A citizen wrote on Twitter regarding the same issue: “It’s very interesting that all the candidates for the 2014 election are talking about the people’s poverty and livelihood, and Jahangiri is talking about some of the people’s welfare, and here oil and bread are becoming 50% more expensive. Why?”

Bread is the main food of the Iranian people and an inseparable part of their table. The government has tried to keep the price of bread stable in every way possible, because its increase in price, like the increase in the price of gasoline, could lead to protests and the people's patience running out.

The government's attempt to stabilize the price of bread has divided bakeries into two models: subsidized and free-range. Subsidized breads are of lower quality and have lost their value. Free-range bakeries have also set their own prices. The failure to address the problems of this sector has caused many bakeries to close their doors.

Source: DW