Nappy shortage hits Iran as forex turmoil leaves producers without raw materials

Nappy shortage hits Iran as forex turmoil leaves producers without raw materials
US sanctions have hit the rial which in turn has hit the financial ability of producers to buy in raw materials to make nappies and other hygiene products. / Gina Randall.
By bne IntelliNews September 5, 2018

Iranian government officials have said that they will do their level best to address shortages of nappies, incontinence pads and sanitary towels now besetting the country amid its economic turmoil, Tabnak website reported on September 5.

Shops had started rationing sales after some panic bulk-buying among Iranian families determined to hoard the items, it added.

The absence of the hygiene products from shelves is forcing the Rouhani administration to act, but the report said that there were fears that prices could be hiked by around 2.5 times on average to solve the situation.

The main reason behind the dearth of nappies and the other products is a decline in domestic production caused by a lack of foreign currency allocations needed by producers to import raw materials. Producers have been left in the dark as to how much hard currency they would have in their accounts to secure the discharge of orders from customs.

Amid the severe devaluation of the Iranian rial (IRR) sparked by the reimposition of sanctions on Tehran by the US, manufacturers have typically been left unsure whether they would be given access to the government’s heavily discounted IRR42,000 to the dollar exchange rate. Officials have apparently negotiated a settlement with the Islamic Republic of Iran Customs Administration (IRICA) which means that the materials required by the producers are released at the secondary market rate, currently hovering around IRR100,000 to the USD, according to bonbast.com. The black market rate stood at IRR138,800 as of around 13:15 local time on September 6.

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