An Investigation on Influencing Factors of Bread and Flour Prices under the Assumption of Concerned Free Market Price Policy in Iran

Given the importance of pursuing a policy of free-market prices in bread and flour markets within Iran’s subsidies reform, this study aimed at recognizing and prioritizing the most important factors affecting the bread and flour prices under such an assumed situation using AHP and FAHP methods and comparing the results. The required data were gathered in 2013 through questionnaires and interviews with seven experts who had been active in government offices as well as the bread and flour producers. Unlike the FAHP results, the AHP results were proven to be valid. Furthermore, the AHP results indicated that the most important contributing factors of flour prices would be domestic wheat prices, international wheat prices plus export volume, respectively; in addition, bread prices would be influenced firstly by flour prices and then by wages and fuel costs, respectively. Therefore, since following the implementation of free-market price policy in bread and flour markets, the bread prices might be significantly influenced by the wheat ‎prices, it would be inevitable to build up a stable wheat market through a market regulation mechanism and to make a careful reconsideration ‎of wheat guaranteed prices in this respect. ‎