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Palaw Index June / 2023

June 2023: Palaw price decreases by 16%.

Notable decline of 33% in wheat flour prices

During June 2023, the cost of preparing palaw in Ashgabat averaged 72.1 Turkmen manat, showcasing a 15.9% decline year-on-year (YoY) compared to June 2022 (with a price of 85.7 manat) and a month-on-month (MoM) decrease of 1.8% compared to May 2023 (when the price stood at 73.4 manat).

In June 2023, there was a decline in prices for all products except for onions and carrots when compared to June 2022 on a YoY basis. Onions experienced a YoY increase of 33.3%, while carrots rose by 10.3% in June 2023 compared to the same period last year. Conversely, other products witnessed a YoY decrease in prices. The most significant price drop was observed in wheat flour at 32.5%, followed by sunflower oil (-31.7%), rice (-16.8%), and beef (-13.1%), as illustrated in Figure 1.

 Notable decline in the price of wheat flour

In June 2023, wheat flour experienced the biggest price decline on a YoY basis. Its price dropped from 12.2 manat in June 2022 to 8.2 manat in June 2023, reflecting a decrease of 32.5%. In Turkmenistan, consumers have the option to purchase both locally produced and imported wheat flour from various shops. Local wheat flour, which benefits from government subsidies, is generally priced slightly lower than imported varieties. It is important to note that farmers in Turkmenistan are obligated to sell their entire wheat harvest to the government at a price determined by authorities. They are not permitted to sell their harvest directly to consumers. As a result, our Palaw Index calculations consider the prices of imported wheat flour.

Turkmen entrepreneurs primarily import wheat flour from Kazakhstan and Russia. The imported flour is offered in both packaged and weight-based forms. Among Turkmen consumers, flour sold by weight is more popular and affordable compared to packaged options. Therefore, the Palaw Index calculations consider the prices of imported flour sold by weight. In terms of monthly changes, the price of wheat flour per 1 kilogram decreased from 9 manat in May 2023 to 8.2 manat in June 2023, representing a price drop of 8.2%.

The two prominent Kazakh wheat flour brands consumed in Turkmenistan are “Мубарек” (Mubarek) and “Кочевник” (Kochevnik). The brand “Мубарек” is produced by Best Kostanay, a company that highlights Turkmenistan as one of their export destinations on their website. On the other hand, “Кочевник” wheat flour is produced by Kazakh Uny LLC, and it is exclusively distributed in the Uzbek market. It is probable that Turkmen entrepreneurs import “Кочевник” wheat flour from Uzbekistan for local consumption.

Between January and April 2023, the exports of wheat flour from Kazakhstan to Turkmenistan witnessed a significant decline of 63% compared to the same period in the previous year. The Food Price Index published by the FAO reveals a 1.3% decline in international wheat prices in June. This decline was attributed to the ample supplies of wheat in Russia, as well as the reduction in wheat export tax implemented during the same month in the country, which contributed to the continued downward pressure on prices.

Weakening correlation between palaw prices and the black market rate

Starting from April 2022, palaw prices have shown a consistent decrease, which was previously linked to the fluctuating USD/manat exchange rate in the black market. However, based on our PI reports, this correlation appears to be weakening in recent months. Since January 2022, the exchange rate has remained stable around 19 manat, diminishing its impact on palaw prices as it no longer fluctuates as significantly as it did before January 2022. Figure 3 provides a visual representation of the relationship between palaw prices and USD exchange rates from June 2022 to June 2023.

Methodology

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.

Progres team strives to make Palaw Index reports as inclusive as possible by tracking the price changes of palaw in all major cities of Turkmenistan. Therefore, we kindly ask you to help us in collecting the prices by filling this out the form.

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