Prices jump in Turkmenistan as war dries up imports from neighbouring Iran

By Marat Gurt

ASHGABAT, March 12 (Reuters) - Retailers and consumers in the Turkmen capital, Ashgabat, say prices for key goods imported from nearby Iran have jumped sharply, as normally lively cross-border trade is disrupted by Israeli and U.S. strikes on Turkmenistan's southern neighbour.

Iran is a major supplier of core consumer goods to Turkmenistan, a mostly desert country of 7 million whose economy relies on natural gas exports, primarily to China. Iranian imports range from fruit and vegetables to construction materials and cigarettes.

Aman, a construction materials dealer in Ashgabat, told Reuters: "Stocks are rapidly depleting, and new shipments are not arriving. The outlook is paralysed and uncertain. We are currently selling Iranian goods at a higher price, 50-70% higher."

Prices for key staples imported from Iran - including potatoes, cucumbers and fruit - had doubled at Ashgabat bazaars as of Thursday, according to local market data. The Turkmen capital lies about 30 km (19 miles) from the Iranian border.

Until the war erupted, Turkmenistan maintained brisk trade with Iran's northern provinces, and both sides had said cross-border commerce was expected to double to $3 billion in the coming years. Iran had also proposed establishing a free-trade zone on the border.

The border with Iran remains open despite the conflict, but with the flow of goods diminished.

Turkmenistan has exported electricity to Iran's northeastern provinces and, in the past, has supplied some of its vast natural gas reserves - the world's fourth largest - to Turkey and Azerbaijan through gas-swap agreements with Iran.

For landlocked Central Asian states, including Turkmenistan, Iran also provides an important outlet to the sea.

Turkmen authorities have not commented on the economic impact of the war in Iran, though the government has described the outbreak of conflict in the Middle East as "regrettable." Turkmenistan has long adhered to strict neutrality in international affairs.

On Wednesday, state media reported that the country's former president and "National Leader" Gurbanguly Berdymukhamedov had congratulated Mojtaba Khamenei on his selection as Iran's new supreme leader.