Palaw Index special report: How much palaw can you afford this Gurban Bayramy compared to previous years?

Gurban Bayramy holds a prominent position among celebrated holidays in Turkmenistan. It is celebrated annually and spans over a period of three days. The upcoming celebration of Gurban Bayramy in 2023 will take place from June 28. This report measures the cost of preparing palaw (a traditional Turkmen dish) for a family of four during the month of Gurban Bayramy and makes a comparative analysis of its costs in relation to previous years.

The cost of preparing palaw in June 2023 was 72.1 manat in Ashgabat. It is 16.8% cheaper than what we observed during last year’s Gurban Bayramy, when its price was 86.7 manat.

As we can see from the chart above, there is a downward trend in prices of palaw between 2021 and 2023. The prices peaked in 2021 at 95.3 manat and declined in both 2022 and 2023. Nevertheless, its price still remains higher compared to the prices observed in 2020, when it was 66 manat.

Price changes with respect to minimum wages

The minimum wage in Turkmenistan is set by the government and it is annually increased by 10%. Based on the current price of palaw (72.1), the average minimum wage earner can buy 16.1 items of palaw during the month of Gurban Bayramy. This is higher compared to what people could afford in the previous 3 years during the month of Gurban celebrations.

Why did the price of palaw decline this year?

There are multiple factors, which could have contributed to the drop in price of palaw. Based on our observation, changes in the prices of beef and sunflower oil over the last years have played the biggest role in palaw prices. Beef and sunflower oil are the costliest inputs among all 6 ingredients and changes in their prices have a bigger effect on the overall palaw prices.

The majority of consumed sunflower oil in Turkmenistan is imported from abroad, 92.4% of which comes from Russia. Importers buy sunflower oil in USD, therefore changes in the value of the USD/manat exchange rate have a direct effect on the prices of sunflower oil sold in Turkmenistan. The exchange rate has been following a downward trend since its peak in April 2021, when it reached close to 40 manat/USD. Moreover, the price of sunflower oil and sunflower seeds in Russia has been going down in recent months following lower demand. These factors together contributed to the drop in sunflower oil prices, which has been occurring since 2021.

Meat prices reached their peak in 2021 at 73 manat due to many factors, including lower production due to the COVID-related lockdowns, increased animal feed prices, and changes in the value of the USD/manat exchange rate. Cottonseed meals are used as animal feed and they constitute a large share in the cost of meat production. Animal feed is also imported from abroad, which is impacted by the value of the USD/manat exchange rate. In 2023, beef prices went down to 58.6 manat per kg due to the lower prices for animal feed and cheaper exchange rates in the black market.

Dual exchange rate

Turkmen economy has been functioning on a dual exchange rate since January 2016. Based on previous Palaw Index reports, it was concluded that changes in the value of the black-market exchange have a big impact on palaw prices in Turkmenistan.

To conclude, we can observe that the cost of palaw has been going down in the last two years in the month of Gurban Bayramy since its peak in 2021 thanks to the declining prices of beef and sunflower oil. However, palaw prices in 2023 are still somewhat higher compared to 2020. Nevertheless, adjusted for the annual wage increases of 10%, the minimum wage earners in Turkmenistan can buy more palaw in the month of Gurban Bayramy in 2023 compared to the previous 3 years.

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