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200,000 Tons Of Rice Rotting At Iran's Depots

Iran - Iranian worker carry sacks of rice in at a rice depot . UNDATED

The Deputy Head of the Islamic Republic of Iran Customs Administration, Mehrdad Jamal Arvanqi, says 200,000 tons of rice stored at Iranian customs and ports is currently rotting for lack of hard currencies.

Arvanqi announced on Thursday that this amount of rice had been stored in the country's customs and ports for months. "By not paying foreign currency to the seller, the international credit of Iranian businessmen has been questioned," he said.

Rice is the second major strategic commodity in the consumer basket of low-income households.

The increase in the price of each kilogram (about 2.2 pounds) of Indian and Pakistani rice from 220 to 250 thousand rials (about $5.20 to $5.90 at official rate), as well as the upward trend in the price of some not "so pure Iranian rice" from 350 thousand rials in recent months, reduced the consumption of rice by low-income households in Iran.

Speaking to the daily Hamshahri on October 5, a representative of the Rice Importers Association said that the reason for the over-100-percent increase in the price of foreign rice was the change of its import reference currency from the "official rate" to the NIMA system, the Persian acronym for Consolidated System of Forex Transactions.

The NIMA exchange is a centralized electronic system established by the Central Bank of Iran in 2018 to streamline foreign exchange purchases and sales among Iranian companies.

Since NIMA is a market where Iranian exporters can sell their foreign currency earnings for Iranian rials, the NIMA exchange rate places a higher value on the rial than the open market rate.

The reports of several thousands of rice rotting at the Iranian ports and customs' depots have coincided with the news that thirty trucks and forty train cars loaded with bananas entered Iran from Turkey.

However, according to the Ministry of Industry, Mines, and Trade, bananas have been removed from the list of consumers' essential commodities since May.

Nonetheless, Arvanqi said the banana consignment had an official registration, and the Central Bank approved the source of the hard currency needed for its import to Iran.