What factors affect the price of Iranian saffron?



 

Saffron of Iran

Iran is the largest producer of Iranian saffron globally, and besides, most of Iran’s saffron products are exported. Therefore, considering this issue, the most critical factors affecting the price of saffron can be categorized as follows:

  • Exchange rate fluctuations
  •  Global and domestic demand for saffron
  • Supply of saffron

Terms & Rules

  •  Customs tariffs of saffron importing countries
  •  The supply of competing countries in the market

Exchange rate fluctuations

As we mentioned at the beginning, as a valuable product, the price of this product also changes with the dollar change. Any change of the swapping scale in the nation will influence the cost of this item. Exchange rate fluctuations have also had positive effects on Iran’s export demand in the long run; Studies show that the exchange rate compared to other variables, has the most significant impact on Iranian saffron export prices.

External and internal demand

Iran exports an average of 230 tons of Iranian saffron to the world every year, and its price will definitely reach its lowest level as foreign demand decreases. Considering that almost 80% of saffron is exported, it is evident that exchange rate changes, air transportation costs by which the main product is shipped, tariff policies of importing countries, and developments related to saffron-related industries in these countries, as part of the determinants of export prices, will affect their demand for Iranian saffron exports.

On the other hand, because Iranian saffron is considered a luxury product in many countries, in the event of global crises and reduced purchasing power of foreign consumers, interest in this item and its cost will be influenced.

Iranian saffron supply

Saffron flower

Obviously, if saffron is found in abundance every year, its price will go down, but if Iranian saffron is not enough during a year, it will be considered a rare product, and its price will reach its maximum. Here are some of the elements affecting the supply of saffron.

Atmospheric Conditions

Atmospheric conditions are one of the elements affecting the cost of saffron in the market. Saffron root is sensitive to cold, and therefore in case of cold weather, frost, or frost due to damage to the saffron root, the supply of this product in the market will decrease, and as a result, its price will increase in the market.
Besides, the occurrence of drought, even though red saffron requires little water, in some cases has led to a decrease in supply and thus increased the price of the product.

Agricultural subsidies and insurance

Due to the changing weather and environmental conditions, agricultural activities are considered risky activities, and producers are constantly faced with damage caused by force majeure and natural disasters, making them always worry about economic performance and reimbursement of various costs.
Agrarian protection assists ranchers with executing more economical administration projects and procedures to diminish hazard. This creates security for production and investment in the agricultural sector.

Land prices and access to water

This plant needs water just twice in the principal year of November (prior to yielding) and early December (toward the finish of yielding), and until spring, water and snow are sufficient for it. The higher the price of the land on which Iranian saffron is grown, the higher the cost of the saffron crop.

Agricultural inputs

The price of agricultural inputs such as chemical and animal fertilizers, pesticides, agricultural machinery, and labor is effective in the price of this product, and thus its supply. Despite the difficulty of harvesting saffron, the saffron product is still traditionally managed in all dimensions despite many advances in technology. Planting, holding, harvesting and even drying method of saffron products is traditional, which causes many problems for the production and supply of this product.

What is the price of different types of Iranian saffron?

In previous articles, we presented the types of saffron; saffron is divided into types of Negin, Sargol, Pushal, and Dasteh (Dokhtarpich). In the meantime, Negin and Sargol are the top prices on the table.Click here for more information.

Customs and tax tariffs for export saffron

There are various tariffs for exporting saffron to different countries, all of which have significant effects on the price of saffron.

Supply of competing countries

Iran is the first and top country for producing saffron for export, but with the passage of time and the high value of this product, we see that this product is also cultivated in European countries.

When is the time to buy saffron?

Red saffron
November is the saffron flower harvest season. This month, many saffron flowers can be seen in provinces such as South Khorasan and Razavi. The abundance of saffron flowers or its shortage is effective in changing the price chart.

Farmers’ expenses for harvesting saffron flowers

Despite adapting to water shortages, Saffron root still needs watering twice a year, in early November and early December. Due to the drought situation in the country and the lack of water in motor wells, irrigation may be expensive for some farmers. After irrigation, saffron roots need chemical fertilizers. Also, light agricultural machinery should be used to level the ground, which is also the case. They can affect prices, while the crop also needs to be cleaned and dried after harvest, each of which can impose costs on farmers.

Climate change

In autumn and cold weather, the crop is difficult to harvest, or very cold weather may damage the saffron flower and cause it to freeze or frost and destroy the saffron in general, reducing the supply of saffron will increase its price. Or vice versa.

Conclusion

Saffron farmer

So, in this article, we talked about the elements that will affect the Saffron price in Iran. In general, many farmers are facing these problems every year. As we mentioned above, the cost of this spice is heavily dependent on the dollar. If it rises, then the price of this spice will increase in the country, and if the price goes up in the country, then the cost of saffron for export will go up, too.





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