LONDON/HAMBURG: Iran has ramped up its campaign to import wheat, buying more than 800,000 tonnes in two weeks in what some traders said was a drive to ensure adequate supplies for a possibly tense period after yesterday’s election.
This is the first presidential poll since a disputed 2009 contest led to months of unrest in the oil-producing country of 75 million people.
Traders believe Tehran has paid a significant premium for at least 200,000 tonnes of wheat this week, adding to the previous week’s purchases of 600,000 tonnes of bread-making wheat and 60,000 tonnes of animal feed wheat from Germany and the Baltic and Black Sea regions.
Some traders said 300,000 tonnes or more of 12.5 percent protein wheat — suitable for bread — may have been bought in the latest purchases. “The pace of buying has been truly incredible,” a European trader said. “Iran is still looking for more.”
Iran, once a wheat exporter, is forecast to need at least 3 million tonnes of imports in the season starting in summer. “Iran has a large supply requirement with market talk that its harvest is not as good as expected,” a trader said.
The latest deals were believed to be for shipment in August, September and October, traders said. “Iran’s elections are among their considerations for these purchases and they want to ensure they have sufficient stocks after the outcome,” a Middle East-based trade source said.
Other Middle Eastern countries, including Tunisia, have also made special efforts to ensure sufficient supplies of wheat at times of political uncertainty to avoid bread shortages.
The European Union and the United States have imposed sanctions aimed at discouraging Tehran’s nuclear programme. Iran insists that its atomic programme is for peaceful purposes.
The sanctions do not target food or animal feed shipments, but financial measures have frozen Iranian companies out of much of the global banking system, which have hindered payments.
Iran has oil revenues of billions of dollars in local currencies frozen in bank accounts in countries such as Turkey and India, which trade sources said were likely to have been tapped for the latest buying campaign. Those accounts can be used to make food purchases in other countries as the sales are deemed to be for humanitarian goods.
A European trader said separately: “Iran is no longer paying for wheat using letters of credit as ever fewer banks are willing to process Iranian trade finance.
“Iran is having to pay cash and exporters are demanding 20 percent payment up front and will not load anything until the vessels are fully paid for.” Traders said the latest deals were in multiple currencies.
The Middle East based trader said Iran was estimated to have paid the equivalent of $315 to $320 per tonne. European traders put the price at around $330 a tonne. By contrast, Tunisia paid $274.68 a tonne for wheat this week. The trader said Iran was using big ships, capable of carrying 60,000 tonne cargoes, called panamaxes.
Reuters
