Bread

Iranian authorities increased the price of traditional breads by as much as 33 percent in the capital, Tehran, the official Islamic Republic News Agency reported, citing a Tehran province official.

A Sangak loaf will now cost 6,000 rials (49 cents), said Nematollah Torki Tehran’s governor deputy for planning. Barbari, Taftoun and Lavash loaves will cost 5,000, 3,000 and 1,600 rials respectively, he said in the report published late yesterday.

The new prices will apply in Tehran bakeries from today, he said, according to the report.

The government previously increased bread prices in April 2011 when the price of a Sangak loaf was fixed at 5,000 rials, Barbari at 3,750 rials and Taftoun and Lavash loaves at 2,500 and 1,250 rials respectively. But it is not just sanctions that are hurting the Iranian people. The president's subsidy reform plan, introduced in December 2010, has also affected the economy.

The reforms were aimed at easing pressure on state finances by cutting tens of billions of dollars from government subsidies on food and fuel, while offsetting the impact on Iran's poorer citizens by giving them monthly cash payments, so they could spend more.

But the policy helped drive up food and energy prices. As a result of increased fuel costs, products became more expensive, which reduced demand, and some firms had to lay off workers and cancel production.