Iran makes big wheat buys in global markets
Hamburg, August 22, 2012
Iran's state grains agency GTC has in the past week discreetly purchased around 400,000 tonnes of milling wheat, largely from the European Union, Baltic Sea and Black Sea regions, European traders said on Tuesday.
Some traders thought up to 500,000 tonnes could be involved.
Iranian wheat imports are usually handled by the private sector but the state had to step in and help with purchasing earlier this year because of the disruption to trade financing caused by Western sanctions aimed at Iran's disputed nuclear programme.
Iran has in the past exported wheat but the trade sanctions were imposed after a bad harvest, forcing the country to quietly enter global markets and make substantial wheat purchases to help feed its large population.
Iran's Government Trading Corporation (GTC) continued its discreet method of contacting traders directly for offers rather than issuing purchasing tenders, making it difficult to glean details of total purchases.
Sanctions do not target food shipments, but they make it difficult for importers to obtain letters of credit or conduct international transfers of funds through banks.
The wheat was largely for September shipment. EU origins were thought to include Germany. 'They are buying without tenders almost every week, I think they're buying a lot of EU wheat,' said a European trader. '(It is) mostly German.'
Another European trader said: 'Iran still has a large import requirement following its poor crop this year and the impact of international sanctions. It is making regular purchases, the most recent purchases were spread around the EU and Black Sea.'
'Some German origin is involved along with some from Scandinavia and elsewhere in the Black Sea. Payment is difficult but possible.'
Iran is still involved in talks about major barter deals for wheat with India and Pakistan. - Reuters