saffron field flowers Export Barriers Against the Saffron Traders

Export Barriers Against the Saffron Traders

Mintec Global
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Solving the foreign exchange commitments is the biggest problem for exporters, including Iranian saffron exporters. These export barriers have increased the smuggling of saffron and selling it about 20 percent cheaper by smugglers. If the obstacles for the exporter are removed, the export of saffron will grow by 40 percent this year.

Smugglers have taken the place of exporters

Last year, the export of saffron decreased by about 28 percent in terms of weight. The decline in saffron exports has started a few years ago. Export barriers are the reason for the decrease in exports. Smugglers have taken the place of exporters. So, the exporter is not able to compete in the international market. One of the main reasons is the return of foreign currency from exports. This issue means that the exporter must give the obtained exchange rate to the government about 20 to 30 percent less than the free-market price and pay the difference with the free-market currency out of his pocket. The smuggler will not suffer due to smuggling from illegal sources.

Smugglers must be stopped

Saffron is a special product that is often smuggled. So, it is emphasized that this obstacle to the export of a product like saffron should be removed. These export barriers have increased the smuggling of saffron and selling it about 20 percent cheaper by smugglers. The Dollar rate should be floating for the exporter, and the saffron rate should be updated. If the obstacles for the exporter are removed, the export of saffron will grow by 40 percent this year.

1,000 USD per kg

In addition, the price of exported saffron is a maximum of 1,000 USD per kilogram. However, the customs base rate is 1,283 USD, and the exporter must pay the currency to the customs according to the base rate. It means that the exporter has exported one kilogram of saffron at the price of 1,000 USD, but he must buy this product for 283 USD from the free market and give it to the government in order not to face threats such as invalidation of the business card and disallowance of activity.

Last year, saffron production increased compared to 2021. Also, a part of the 2020 production was purchased at the prices set by the government in 2021. Unfortunately, the export of this product decreased last year because the 2021 product was exported in 2022 and the restrictions. It should be mentioned that the officials and policymakers of Iran provide statistics on the growth of the export value of saffron without paying attention to the effects and consequences of the decrease in export weight of this strategic product and ignoring the fluctuations in the global price of saffron as well as the Dollar price. The cost of saffron has grown significantly in 2022 compared to 2021.

10 percent increase in price

Compared to the last 6 weeks, the price of Iran’s exported saffron in the world markets has increased between 6 and 10 percent. The increase in domestic and export demand due to the arrival of Ramadan is the most important factor in increasing the price of Iran’s exported saffron in the world markets. Also, the decrease in the exchange rate of foreign currencies against the Rial, which occurred due to the agreement between Iran and Saudi Arabia to resume political and economic relations, is another influential factor in increasing the price of this Iranian export product in the world markets.

 

Saffron
TypeGrade $ Price€ Price
NeginPremium Grade1063975
All Red(Sargol)Premium Grade989907
PoushalPremium Grade934857
Bunch(Dasteh)Premium Grade828760

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