Sep 4, 2018

Diaper prices have been rising in recent weeks in Iran, putting pressure on working and middle-class families harder at a time when nothing is immune from biting inflation.

Iran's diaper needs are met by both imports and domestic manufacturers.

The recent increase in prices has been blamed on the devaluation of the national currency as well as hoarding by some distributors of imported brands. Union leaders also say a lack of raw materials has led to a production halt at several diaper factories in the country. "At least 10 Iranian diaper producers are on the verge of bankruptcy," Seyyed Hossein Dokmehchi told Iran Labor News Agency.

Domestic diaper companies that rely on imported raw materials for production appear to be in a bind as the bulk of such goods is stuck in customs offices. They had registered their orders based on the official exchange rate of 42,000 rials per dollar, per recent directives issued by the Central Bank of Iran for essential goods. Now the importers are required to pay a margin calculated on a secondary rate for the importation of non-essential goods. That rate stands at around 90,000 rials per dollar, far higher than the rate extended to prioritized imports, but lower than the open market of around 14,000 rials per greenback.

As such, when or if the raw materials are released from customs, diaper prices are not expected to stabilize and further inflation is likely. According to the moderate Entekhab News Agency, officials have promised to tackle the scarcity, but have predicted that diaper prices will more than double due to the cut in importer access to hard currency at the official rate.