December 2023: the cost of palaw dropped by 13.1% in 2023.
Sunflower oil and wheat flour prices had the largest impact on palaw prices.
In December 2023, Ashgabat witnessed a significant reduction in the average cost for preparing palaw, which fell to 60.0 Turkmen manat, marking a 22.2% decrease from the December 2022 cost of 77.1 manat. For 2023 as a whole, the Palaw Index showed a 13.1% decline in comparison to the average value of 2022. This trend mirrored the FAO’s Food Price Index, which also fell by an average of 13.7% in 2023 relative to 2022.
Price changes in palaw ingredients in 2023
Throughout 2023, the average prices of palaw ingredients fluctuated. Onion and carrot prices rose, while other ingredients became cheaper. Onions, specifically, saw an average price surge of 48.5% compared to 2022, primarily due to severe cold weather in early 2023 in Turkmenistan, which damaged onion crops and caused prices to triple during the winter months. Even though onion prices stabilized by mid-2023, the yearly average was still affected by the early high prices. Carrots experienced a 10.3% price increase in 2023.
Conversely, several products saw notable price decreases in 2023. Sunflower oil prices dropped the most, by 30.8% compared to 2022, largely due to an increased global supply and Turkmenistan’s imports from Russia with favorable USD/ruble exchange rates. This drop aligned with the FAO’s Vegetable Oil Price Index, which decreased by 32.7% in 2023. Wheat flour prices fell by 27.9%, beef by 15.7%, and rice by 3%. The FAO’s Cereal Price Index, which includes wheat prices, was down 15.4% from its 2022 average, reflecting a well-supplied global market.
Correlation between palaw prices and the black market rate
In recent years (2020-2022), Palaw Index price changes closely followed the USD/manat black market exchange rate. However, this correlation seemed to weaken due to a stable exchange rate around 19 manat/USD since 2022. The biggest driver of changes in palaw prices in 2023 were external factors such as increased supply of sunflower oil and wheat flour in the global market. Moreover, the changes in the Palaw Index closely resembled those in the FAO’s Food Price Index. Yet, it is crucial to acknowledge that the dual exchange rate system still poses significant risks to Turkmenistan’s economy, as highlighted in previous Progres.online articles.
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.
