November 2023: Palaw costs decline by 15%.
Continued downtrend observed in sunflower oil prices.
In the month of November 2023, Ashgabat experienced a notable drop in the average cost of palaw preparation, reaching 68.7 Turkmen manat. This represents a 14.8% decrease from November 2022’s figure of 80.6 manat. Comparatively, this price reflects a slight 0.7% increase from October 2023’s cost of 68.2 manat. The FAO’s Food Price Index also reported a significant average decline of 10.7% in global food prices compared to the same period last year.
Turkmenistan saw a general trend of price reductions in various products in November 2023, with the exception of carrots, as per year-on-year data. In a stark contrast, carrot prices soared by 34.8% compared to November 2022. Other products, however, witnessed notable price drops. The most significant decrease was in sunflower oil, plunging by 42.0%. This was followed by significant reductions in onion prices (-37.1%), wheat flour (-22.3%), beef (-14.6%), and rice (-3.4%), as illustrated in Figure 1.
Sunflower Oil Prices Drop Again
The latest FAO data reveals a global decrease in vegetable oil prices, with a 19.8% year-on-year drop from November 2022 to November 2023. In Turkmenistan, the price of sunflower oil saw a significant 42% decline during the same period. Turkmenistan relies on imports for its sunflower oil, exclusively from Russia. The advantageous USD to ruble exchange rate enabled Turkmenistan to purchase the oil at a lower cost. In November 2023, the wholesale price for Russian sunflower oil stood at 863.7 USD per tonne, a decrease from 1147.9 USD per tonne in November 2022, marking a 24.8% reduction in USD terms.
The drop in sunflower oil prices was more pronounced in the Palaw Index (42%) compared to the 24.8% difference in the retail prices of Russian sunflower oil. This discrepancy suggests that Turkmen retailers may have had larger profit margins on imported Russian sunflower oil last year. For example, converting the wholesale price in Russia to Turkmen manat and comparing it with Turkmenistan’s retail prices offers insight. In November 2022, the Russian wholesale price was 21.8 Turkmen manat per liter, whereas Turkmen retailers sold it for 31.6 manat. In contrast, the November 2023 wholesale price in Russia was 16.8 manat, with Turkmen retailers selling it at 18.3 manat. This pricing pattern indicates that profit margins on imported sunflower oil were considerably higher in November 2022, likely due to lower competition among Turkmen oil importers last year.
Correlation between palaw prices and the black market rate
Starting in April 2022, there has been an ongoing decrease in palaw prices. Initially, this decline was linked to the fluctuations in the USD/manat exchange rate on the black market. However, this connection appears to be weakening in recent months. Since January 2022, the exchange rate has stabilized at around 19 manat, which has resulted in a reduced impact on palaw prices.
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.
