Reference Date: 22-November-2024

Above-average cereal harvest estimated in 2024

Cereal production in 2024 is estimated at 22.4 million tonnes, about 10 percent above the average. The wheat harvest, completed at the end of September 2024, is estimated at 14 million tonnes, about 10 percent above the five-year average. The large outturn in 2024 mainly reflects favourable rainfall amounts across the producing regions, coupled with the sustained governmental support through the provision of subsidized inputs, low interest rate loans and technical training during sowing and harvesting. In addition, the guaranteed government procurement price of IRR 17 500 /kg for wheat, about 50 percent higher than the previous year, prompted farmers to plant large areas, further contributing to the above-average wheat harvest. According to the Ministry of Agriculture, as of mid-October 2024, the government procured over 12 million tonnes of wheat, around 16 percent year-on-year increase.

For the upcoming 2024/25 season, the government plans to raise the wheat production level from the previous year, with the aim to achieve self-sufficiency by providing support to farmers and increasing the procurement price to IRR 20 500/kg of wheat, encouraging farmers to expand the planted area. However, La Niña event is anticipated to have an adverse impact on yields due to dry weather conditions between January and May 2025 when the main wheat crops will be at vegetative stages. In the key cereal producing Khuzestan Region, planting of wheat and barley crops is expected to start in mid-November 2024. The government has allocated water supply to irrigate about 650 000 hectares, while about 300 000 hectares will rely on rainfall.

According to FAO, no locust was found in the country in early November 2024 and forecasts indicate that no significant increases in numbers of desert locusts are likely until mid-December 2024.

Cereal import requirements expected at low levels in 2024/25

Wheat import requirements for the 2024/25 marketing season (July/June) are forecast at 1.3 million tonnes, about 65 percent below the average, reflecting the abundant wheat output harvested in 2024.

Prices remain at high levels as of mid-2024

Annual inflation rate hovered around 30 percent in September 2024, gradually declining from the ten-year-high of 55.5 percent in April 2023 as new monetary measures stabilized the exchange rate. However, despite the decline of the inflation rate, overall food prices remain at high levels. The retail price of rice in Tehran market reached IRR 700 000/kg in October 2024, almost 32 percent above the level of 12 months before.

The government allocated USD 40.5 billion in subsidized currency for imports of essential goods for fiscal year 2024/25 (21 March 2024 to 20 March 2025) to mitigate the significant price hikes in domestic markets. The subsidized exchange rate for essential goods imports stands at IRR 285 000/USD 1, which tends to curb inflationary pressures on essential foods and imported commodity prices. The subsidized rate is about half of the market rate which is about IRR 645 000/USD 1 in October 2024.

Concerns on prolonged high inflation, currency depreciation, slow economic growth and sluggish livelihoods are likely to limit households’ purchasing power and food accessibility.

Disclaimer: The designations employed and the presentation of material in this information product do not imply the expression of any opinion whatsoever on the part of FAO concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries.

This brief was prepared using the following data/tools:
FAO/GIEWS Country Cereal Balance Sheet (CCBS) https://www.fao.org/giews/data-tools/en/ .

FAO/GIEWS Food Price Monitoring and Analysis (FPMA) Tool https://fpma.fao.org/ .

FAO/GIEWS Earth Observation for Crop Monitoring https://www.fao.org/giews/earthobservation/ .

Integrated Food Security Phase Classification (IPC) https://www.ipcinfo.org/ .