May 2023: the cost of palaw drops by 11%.
Sunflower oil and beef prices register a notable decline.
In May 2023, the average expenditure for preparing palaw in Ashgabat was 73.4 Turkmen manat, indicating a year-on-year (YoY) decrease of 10.9% compared to May 2022 (when the cost was 82.4 manat) and a month-on-month (MoM) decrease of 2.2% compared to April 2023 (when the cost was 75.0 manat).
During May 2023, all products except for onions saw a decline in prices compared to May 2022 on a YoY basis. Onion prices experienced a substantial YoY increase of 82.7% in May 2023 when compared to the same period last year. Conversely, other products witnessed a YoY decrease in prices. The most significant price drop was observed in sunflower oil by 29.7%, followed by wheat flour (-21.3%), beef (-11.4%), carrot (-7.4%), and rice (-5.6%), as shown in Figure 1.
The impact of price changes in sunflower oil and beef
The decrease in the Palaw Index during May 2023 can be primarily attributed to significant price reductions in sunflower oil and beef. Sunflower oil experienced a notable decrease of 29.7%, while beef prices declined by 11.4% on a YoY basis. As these two ingredients generally have higher costs compared to other components of palaw, their price fluctuations have a greater impact on the overall palaw prices.
The prices of sunflower oil registered a price decline for 2 months in a row on a YoY basis. From May 2022 to May 2023, the price decreased from 33.3 manat to 23.4 manat, representing a decrease of 29.7%. On a month-on-month (MoM) basis, there was a slight increase from 22.4 manat in April 2023 to 23.4 manat in May 2023. The primary factor contributing to the decrease in sunflower oil prices is the decline in prices in sunflower oil exporting countries like Russia, which is the main supplier of imported sunflower oils in Turkmenistan.
From May 2022 to May 2023, the price of beef decreased from 67.7 to 60 manat, indicating an 11.4% YoY decline. This downward trend in beef prices has been observed since its peak of 100 manat in August 2021. Over the past year (May 2022-2023), the price of beef has maintained an average range of 56 to 68 manat. According to our source in the country, the primary reason behind this gradual price decline is attributed to the decreasing prices of animal feed in Turkmenistan. Cows are predominantly fed with cotton seed residues, allowing them to achieve sufficient weight for market readiness.
Onion prices continue to drop
During May 2023, onion prices in Turkmenistan continued to decrease on MoM basis following a peak in March 2023, where the price skyrocketed to 15.6 manat per 1 kg. The price dropped to 7.3 manat in April 2023 and further declined to 5.5 manat in May 2023. However, when compared to the same month in the previous year (May 2022), onion prices are still significantly higher, with an increase of 82.7%. In May 2022, the price was only 3 manat per 1 kg (see Figure 2).
Correlation between palaw prices and the black market rate
Since April 2022, there has been a consistent decline in palaw prices, which can be attributed to the fluctuating value of the USD in the black-market exchange rate. This downward trend continued in May 2023, with a year-on-year decrease of 10.9% in palaw prices. Simultaneously, the USD/manat exchange rate in the black market was valued at 19.5 manat in May 2023, remaining relatively stable around 19-20 manat since January 2022. Figure 3 visually demonstrates the correlation between palaw prices and USD exchange rates from May 2022 to May 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.
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.