August 2023: Palaw price plummets by 22%.
Notable increase in prices of carrot by 52%
In August 2023, the cost of preparing palaw in Ashgabat averaged 68.2 Turkmen manat. This figure marked a significant year-on-year (YoY) decrease of 21.7% compared to August 2022 when it stood at 87.0 manat. Additionally, there was a month-on-month (MoM) decline of 0.9% compared to July 2023, when the cost was 68.8 manat.
During August 2023, the prices of all products except for onions and carrots saw a decline when compared to August 2022 on a YoY basis. Onion prices increased by 16.7%, while carrot prices experienced a notable rise of 51.5% in August 2023 compared to the same month of the previous year. The other products witnessed price reductions, with the most significant decrease occurring in the price of wheat flour at 50%, followed by sunflower oil (-47%), rice (-27.7%), and beef (-14.5%), as illustrated in Figure 1.
Carrot prices experienced their most substantial increase since September 2021
In August 2023, the price of carrots surged by 51.5% compared to the same month of the previous year, August 2022. The cost of 1 kilogram of carrots rose from 3.4 manat to 5.2 manat during this period. Looking at a month-on-month basis, carrot prices climbed from 3.4 manat in July 2023 to 5.2 manat in August 2023, marking a substantial increase of 52.2%.
Since 2018, the country’s total carrot imports have not exceeded 2,000 USD, as of OEC data. Prior to 2018, Turkmenistan used to import carrots from Iran at a larger scale. In contrast, the total export value of carrots and turnips from Turkmenistan reached 325,000 USD in 2021, a notable increase from previous years.
Turkmenistan does not publicly release annual or monthly data on domestic carrot production. Information from the FAO indicates that carrot production in Turkmenistan is only available up to 2021, with no data for 2022 and 2023. In 2021, carrot production amounted to 72,385 tons, and over the past five years, production has consistently hovered around 71,000 tons per year. Carrots in Turkmenistan are typically sown in early summer after the wheat harvest and harvested in late autumn. They can also be grown in greenhouses throughout the winter and harvested in the spring.
Based on anecdotal information gathered from Turkmen farmers, it appears that fewer farmers chose to cultivate carrots in Turkmenistan in 2023 due to their low profitability. Consequently, this reduced production and competition, leading to a rise in carrot prices. However, verifying such claims is challenging due to the absence of published data on carrot production in Turkmenistan.
Global Food Price Trends
Food prices have not only decreased in Turkmenistan but also on a worldwide scale. According to the FAO’s Food Price Index, global food prices experienced an average YoY decline of 11.8% in August 2023. The drop in international vegetable oil prices was particularly significant, with a 23% decrease year-on-year, driven by reduced import demand coinciding with ample supply from major exporting countries. International meat prices also saw a decline of 5.4% compared to their value from a year ago, driven by increased export availability, notably from Australia, and decreased demand from China. Global cereal prices, encompassing wheat prices, recorded a decrease of 14.1% in August 2023 compared to the previous year.
Correlation between palaw prices and the black market rate
Commencing from April 2022, there has been a continuous decline in palaw prices. Initially, this decline was attributed to the volatility in the USD/manat exchange rate within the black market. Nevertheless, this connection seems to be diminishing in the more recent months. From January 2022 onwards, the exchange rate has maintained stability at approximately 19 manat. This stability has led to a reduction in its impact on palaw prices, as the exchange rate no longer experiences the pronounced fluctuations observed earlier.
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.
