Saffron Super Negin
Saffron Poushal (Grade A )
Saffron is a precious spice and its price has been volatile in recent years. We have tried to classify and examine the factors that affect the saffron price, such as exchange rate fluctuations, global and domestic demand, saffron supply, rules and regulations, and changing customs tariffs. To a large extent, we have to analyze the reasons for the saffron price fluctuations.
As you might know, Iranian saffron is highly popular in the world. A bulk part of Iran’s saffron products is exported to Asia and Europe. The most influential factors affecting the Iranian saffron price can be classified as follows:
Climatic condition is a severe factor affecting the Iranian saffron price in the market. Saffron root is sensitive to very cold or hot temperatures; therefore, the probability of damaging the saffron root increases. The global climate changes have caused difficulties to cultivate saffron and its price is surging. In addition, the occurrence of drought, despite the fact that saffron needs little water, in some cases has led to a decrease in the supply.
Agricultural Subsidies and Insurance
Due to the changing weather and environmental conditions, agricultural activities are considered risky. Producers are always faced with damages caused by force majeure and natural disasters, which makes them always worry about economic performance and reimbursement of various costs.
As a matter of fact, agricultural insurance helps farmers implement more sustainable management programs and strategies to reduce risk. This creates security for production and investment in the agricultural sector but increases the final costs for the farmers.
Land Prices and Access to Water
This plant needs water only twice in the first year of November (before yielding) and early December (at the end of yielding). In spring, rainwater and snow is enough for the land. The increasing price of the farming lands and irrigation in Iran are pushing the price of saffron higher.
The price of agricultural inputs such as fertilizers, organic pesticides, agricultural machinery, and labour is effective in the price of this product and its supply. Despite many advances in technology, the saffron product is still traditionally managed in all dimensions. Planting, holding, harvesting and even drying method of saffron product is traditional, which causes many problems for the production and supply.
Saffron Market Rules and Regulations
In general, customs, export policies, export bonuses, guaranteed purchases and even taxes have affected the saffron market at some point in time.
Customs Tariffs of Saffron in Destination Countries
Due to the fact that most of Iran’s saffron is exported, therefore, the rate of import tariffs in destination countries will have a great impact on the price of saffron and its exports. The obligations for organic saffron or chemical contents limits have complicated the import procedure in various countries.
The Supply of Competing Countries in the Market
Iran is the major producer and exporter of saffron in the world, but we should not neglect other countries operating in this field. Due to the high financial turnover of saffron, countries are making significant policies and investments to increase their share in the global market. This issue will not only challenge Iran’s position in the market but will also lead to possible fluctuations in its price due to the increase in supply.