Week in Brief 07.09.2018

Shortage in diapers was the hottest topic of the week. Several families rushed to supermarkets to buy their need for the next months, fearing that the diapers manufacturers will soon run out of production.

There are 150 manufacturers in Iran with production capacity of 280 thousand tonnes of various types of diapers. During the last Iranian fiscal year, their operation capacity has been at 125 thousand tonnes according to the Ministry of Industry and Trade.

The figures show that Iranian manufacturers have always met the demand at this market over the past years. However, since the cellulosic industry in Iran is highly dependent on the import of the raw material, devaluation and the return of the US sanctions put them at risk.

Rial once again sank to another lowest record, losing more further 50% of its value against US dollar. Now one USD is equivalent to nearly 150.000 rials.

The dependency of manufacturing to the import of raw material has caused people to panic.

The Head of Cellulosic Industry Association of Iran, Abbas Fasih Khoshgard, claims that raw material for production has now been released from the Custom Administration and the production will be resumed next week. However, he expects prices to be at least doubled.

Custom Office in Bandar Abbas said that nearly 2000 tonnes of raw material for diaper production has been deposited in their warehouses, waiting for declaration from their importers.

Importers who brought the goods to the country at a lower exchange rate of 42.000 rials for each dollar, were asked to pay the difference with the new exchange rate (140.000 rials for each USD) to be able to release their goods. This requirement was lifted this week.

The shortage in raw material, therefore, caused the production to slow and the sharp increase in demand created lots of chaos in this market.

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