April 2023: the cost of palaw keeps dropping.
Onion prices began to decrease amid the new harvest in April. Sunflower oil saw a major drop in price.
The average cost for preparing palaw in Ashgabat was 75.0 Turkmen manat in April 2023. This represented a 4.7% year-on-year (YoY) decrease compared to April 2022 (when the cost was 78.7 manat), as well as a 4.7% month-on-month (MoM) decrease compared to March 2023 (when the cost was also 78.7 manat).
In comparison to the prices observed in April 2022, the prices of onion and rice have increased, whereas the prices of other products have decreased on a YoY basis. Onion prices rose by 41.2% and rice prices increased by 22.5% YoY. The prices of other ingredients have decreased, including sunflower oil (-36.4%), wheat flour (-14.3%), beef (-10.0%), and carrots (-1.2%) during the same period, as shown in Figure 1.
The price of onions has begun to drop for the first time since January 2023
The price of onions dropeed on a month-on-month basis, falling from 15.6 manat in March 2023 to 7.3 manat in April 2023, representing a significant 52.9% decline. However, prices remain 41.2% higher compared to the same period last year in April 2022. The start of the onion harvest in April led to an increase in domestic supply and a subsequent decrease in prices. Additionally, neighboring Central Asian countries lifted their export bans on onions due to their own recent harvests, further contributing to the decline in prices in April 2023.
It is worth noting that onion prices rose dramatically in January 2023 due to the extreme cold weather in Turkmenistan that damaged most of the onion harvest. Please refer to Figure 2 for the price changes of onions between January 2022 and April 2023.
Sunflower oil saw a major drop in price
Sunflower oil experienced a sudden 22.7% month-on-month price drop, falling from 29 manat in March 2023 to 22.4 manat in April 2023. Furthermore, in comparison to the same month in the previous year (April 2022), the price of sunflower oil decreased by 36.4%. It is worth noting that the majority of sunflower oil consumed in Turkmenistan is imported, with 92.4% of imports coming from Russia.
In April 2023, the cost of a one-liter bottle of sunflower oil sold in Russia was roughly 1.04 USD, reflecting a 28.8% year-over-year decrease compared to its price in April 2022, which was 1.46 USD. This drop in export prices of Russian sunflower oil may have contributed to the reduced price of sunflower oil sold in Turkmenistan. Additionally, the cost of sunflower seeds in Russia declined in March 2023, reaching the lowest level since November 2022, due to a decrease in demand from sunflower oil producers. As sunflower seeds are a vital component in the production of sunflower oil, this price drop could have also influenced the lower cost of sunflower oil in Turkmenistan.
Sunflower oil prices in Turkmenistan have been consistently decreasing since their peak of 62 manat in June 2021. The main reason for this downward trend has been the decline in the USD/manat exchange rate, which was at its highest point between April and June 2021. Since then, the exchange rate has been decreasing at a similar rate. As most of the sunflower oil consumed in Turkmenistan is imported in other currencies, fluctuations in the exchange rate have a significant impact on the price of sunflower oil. Please refer to Figure 3 for a visual representation of the price changes in sunflower oil in Turkmenistan from June 2021 to April 2023.
Correlation between palaw prices and the black market rate
Palaw prices have consistently declined since April 2022, which can be attributed to the fluctuating value of the USD in the black-market exchange rate. This trend continued in April 2023, with palaw prices decreasing by 4.7% year-on-year. As of April 2023, the black-market exchange rate is valued at 19.6 manat per USD, which is 1.3% higher than the exchange rate observed in April 2022. Figure 4 provides a visual representation of the correlation between palaw prices and USD exchange rates from April 2022 to April 2023.
Prices of ingredients in the Palaw Index are collected for 1 kg of onion, carrot, beef, rice, and flour, and 1 liter of cooking oil. Based on the methodology, in order to cook palaw for a family of four, we use 0.3 liters of cooking oil, 0.5 kg of onion, 1 kg of carrots, 0.6 kg of beef, 1 kg of rice, and 0.5 kg of flour in our formula. Please click here to learn more about the methodology of the Palaw Index.
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