July 2023: Palaw price plummets by 21%.
Notable downturn in rice prices
In July 2023, the average cost of preparing palaw in Ashgabat was 68.8 Turkmen manat, indicating a year-on-year (YoY) decrease of 20.6% compared to July 2022 when it cost 86.7 manat. Additionally, there was a month-on-month (MoM) decline of 4.5% compared to June 2023, during which the cost was 72.1 manat.
In the month of July 2023, prices for all products showed a decline when compared to July 2022 on a year-on-year basis. Notably, wheat flour and sunflower oil experienced the most significant drops, decreasing by 45.5% and 40.2% respectively. Other products also saw decreases: rice prices went down by 21.2%, followed by beef (-13.1%), carrot (-8.6%), and onion (-2.8%), as depicted in Figure 1.
Rice prices are finally declining after 10 months of continuous growth
The average cost of rice saw a reduction from 23.4 manat in July 2022 to 18.5 manat in July 2023, reflecting a significant decline of 21.2% when considering the YoY comparison. Furthermore, there was a noticeable decrease of 7.2% when comparing the month of July 2023 with June 2023. This decrease can be primarily attributed to our calculation methodology, which involved the inclusion of the more economical type of rice due to the limited availability of the higher quality variant.
Within Turkmenistan, two main types of rice are cultivated among many: Elenge, known for its premium quality, and Nukus, which holds a slightly lower quality in comparison to Elenge. In the current year, the supply of Elenge rice diminished, leading to a rise in popularity of Nukus rice. As an illustration, during July 2023, a kilogram of Elenge rice was priced at 22.5 manat, while Nukus rice had an average cost of 17.6 manat during the same period. Furthermore, an Indian rice brand named “Alalye” entered the Turkmen market at a price of 18 manat. Consequently, the increased availability of the more affordable Nukus and “Alalye” rice contributed to the decline in rice prices within Turkmenistan. When examining the prices of Elenge rice, there was an 8.2% reduction from 24.5 manat in July 2022 to 22.5 manat in July 2023, based on a YoY analysis.
The impact of the Indian export ban on rice on Turkmenistan
On July 20, 2023, India enacted a ban on the export of non-basmati rice in order to ensure sufficient availability within its domestic market. Notably, India holds the distinction of being the world’s largest rice exporter. The FAO’s All Rice Price Index indicates a global increase in rice prices by 2.8% due to the implementation of the export ban by India. The rice price marked the highest level observed since September 2011.
In Turkmenistan, the majority of consumed rice is domestically produced, with imports comprising only a minor portion of consumption. The country mainly imports rice from India, the UAE, Pakistan, and Russia. Among these, India stands out as the largest rice supplier to Turkmenistan. In the year 2021, India’s rice exports to Turkmenistan accounted for a value of 218,000 USD. It’s worth noting that the Indian rice “Alalye” which is sold in Turkmenistan, falls under the category of basmati rice. As a result, it remains unaffected by the Indian export ban on non-basmati rice.
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 in 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.
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.