29 Nov 2012

Food supplies tightening in Iran

6:03 am on 29 November 2012

Iran's food distribution system is in crisis even though Western sanctions do not directly target the market, badly hurting the poor and turning some staples into luxuries.

Private importers are shrinking from deals made risky by turmoil in the rial currency. Many foreign banks are reluctant to finance even trade exempt from the sanctions for fear their reputations could suffer simply for doing business with Iran.

The result is that the state is under growing pressure to import and allocate more goods as it tries to avoid any social unrest due to shortages and soaring prices.

Private traders are cutting imports of staples such as grain and sugar. Iran is estimated to consume around 15.5 million tonnes of wheat a year and about 2.6 million tonnes of sugar.

Earlier this year, Iran's police chief urged television stations not to show people eating chicken, as a jump in poultry prices has made it a rarity in many homes.

Iraj Nadimi, a member of parliament's economics committee, was reported by the Fars News agency as saying the government had made a decision to increase food stores from three to six - to nine months.

The Mehr news agency reports distribution of milk in schools is being limited.