The price of the Iranian saffron has stumbled to historical lows as a coronavirus pandemic hits major customers in Europe.
A major Iranian saffron trader said that prices have been down by more than a half in recent weeks and reached a point where even the illegal trade of saffron across the eastern Iranian borders is no longer tenable.
Ali Hosseini, a member of Iran’s National Saffron Association, said that prices are now plummeting to $400-500 per kilogram of the spice, levels that had never been seen since the 1980s and 1990s.
Hosseini said that the main reason for depressed prices was record low demands from Spain and Italy, the two main destinations for Iran’s saffron exports.
Spain has always been on top of Iran’s list of saffron exports with companies in the European country buying the spice in significant volumes to process it for use various industries like food and pharmaceuticals. The European country used to import around 70 tons of saffron from Iran each year.
International saffron prices saw a major boom over the past years and reached all-time highs of $1,100 per kilogram.
The expensive spice had become popular among smugglers who shipped it to countries like Afghanistan to send it to Europe as American sanctions on Iran sometimes intervened with direct exports.
Saffron, Iranian gold
Saffron cultivation and harvest is a painstaking process which requires 200,000 strands of crimson crocus blooms to be gingerly picked in the morning to make one kilo for sale.
Iran produces over 90% of the world’s saffron, with the northeastern Khorasan province being the capital of the spice. However, the country’s share of the $8.2 billion business is only $286 million.
Much of the crop produced by villagers are bought at knockdown prices by local arbiters who themselves sell it to foreign buyers in large stocks. This means the bulk of the added-value accrues to foreign intermediaries, while the genuine produce barely reaches the end consumer.
Saffron cultivation has a history of more than 3,000 years in Iran, where the reddish, aromatic substance is used to flavor food and pastries, with further application in medicine and cosmetics.