Raisins: food crisis gives rise to smuggling

Mundus-Agri: Several problems emerging while harvesting are underway in many parts of Iran. Not only will the crop be smaller than anticipated, but the rise in production costs for grapes and raisins is also impacting trading on other levels.

Illegal raisins gain traction.

Iran’s raisin exports, for instance, declined by 55% to 41,194 mt between January and May, and traders are anything but optimistic for the new season. The issue is uncompetitive prices. The average price of Iranian raisins for 200-300 USD is higher than Turkish origin. The high prices are rendering it unattractive for producers to dry grapes and sell raisins in the new season. Many growers will, therefore, prefer to sell fresh grapes. Suppliers have also been unable to sell considerable volumes of the 2021 crop.

The surge in food prices and the global food crisis is also giving rise to smuggling. Issue is that Iran’s neighbours, Iraq and Afghanistan, are particularly vulnerable to the current crisis and require more food from Iran. This also affects raisins. Traders report that some suppliers tend to employ a single-use business card to send raisins to other countries, which renders it impossible to trace them. The unofficial route also enables them to avoid importing foreign currencies to Iran, which they would then have to transfer into the Nima system at a high cost. Smuggling is, in other words, much more attractive than legal exports.

Production decline drives up prices

Anticipations of a lower crop due to adverse weather conditions in winter and early spring coupled with the fact that growers are selling fresh grapes rather turning them into raisins have driven up prices in the domestic and in the export market. Prices have risen by around 4-5% in the past two weeks.