February 2024: Palaw costs decline by 19%.
Prices of wheat flour continue to decline.
February 2024 witnessed a substantial decline in the cost of preparing palaw in Ashgabat, with the average expense dropping to 63.0 Turkmen manat, marking a 19.2% reduction compared to February 2023’s figure of 77.9 manat. This decrease also represented a minor uptick of 1.6% from January 2024’s cost of 62.0 manat. Globally, food prices, as reported by the FAO’s Food Price Index, experienced a noteworthy average decline of 10.5% in February 2024 compared to the previous year.
Turkmenistan observed a general trend of price reductions across all products in February 2024 per year-on-year data, except for carrots. Carrot prices were up by 46.8% in February 2024 on a YoY basis. Onion prices saw a remarkable drop, plummeting by 71.4%. This was followed by significant reductions in sunflower oil prices (-40.2%), rice (-24.8%), wheat flour (-17.8%), and beef (-3.1%), as illustrated in Figure 1.
Impacts of state purchase price of wheat flour
In February 2024, the price of wheat that the government buys from farmers was increased by the state from 800 manat per ton to 2000 manat. It had an immediate impact on the price of wheat flour in state-owned stores, which increased from 1 manat per kg to around 3.5-4 manat per kg. However, its impact on wheat flour sold in private stores was not too significant. This is especially true for wheat flour prices within the Palaw Index, because we collect the prices of imported flour from Kazakhstan and Russia.
The FAO Cereal Price Index, which also includes wheat prices, went down by 22.4% in February 2024 from its corresponding value one year ago. Export price of wheat and barley from Kazakhstan has also gone down by 10.2% in February 2024. Turkmenistan was the third largest importer of wheat from Kazakhstan in 2023. During the last year, Turkmenistan imported 528.1 thousand tonnes of wheat from Kazakhstan for a total amount of 173 million USD.
The biggest decline among palaw ingredients occurred in onion prices with 71.4% drop in February 2024 on a YoY basis. However, as it was explained in the previous month’s report, onion prices during last year’s winter months were up by more than 100% due to the extreme cold weather that Turkmenistan faced, which damaged most onion crops. Prices then went back to normal upon the new harvest last spring. Hence, the current price of 4.2 manat per kg is in the normal range of onion prices.
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.
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.
