Iran bought up to 1 mln tonnes of wheat in recent weeks

Reuters – Iran has bought up to 1 million tonnes of wheat in recent weeks on international markets, trade sources said on Thursday.

Origins for the purchase are expected to include Russia and some European Union countries, including Germany, they said.

Two Panamax bulk carriers loaded with Russian wheat will be leaving a major Russian port for Iran next week, a source familiar with the schedule told Reuters.

Iran is planning to import 3 million tonnes of wheat this Iranian calendar year ending in spring 2020, an official from the country’s Federation of Food Industry Associations said in October.

Tehran has signed memorandums of understanding with Russia and Kazakhstan for temporary imports of wheat, Deputy Agriculture Minister Ali Akbar Mehrfard told the official IRNA news agency last month.

“We will have to see how much actually gets delivered as trade finance with Iran is still very difficult,” one trader said of the latest purchases.

Under U.S. sanctions over Iran’s nuclear programme, the Islamic republic is blocked from the global financial system. Food, medicine and other humanitarian supplies including animal feeds are exempt.

But the U.S. measures targeting everything from oil sales to shipping and financial activities have deterred some foreign banks from doing any Iranian business, including humanitarian deals such as food shipments.

More than 20 ships carrying around one million tonnes of grain were in October stuck outside Iranian ports as U.S. sanctions created payment problems and hampered the country’s efforts to import vital commodities.

Multinational grain companies were not believed to be sellers in the latest deals. Two Middle East-backed traders and one Asian trading house were said to be mainly behind the sales.

“I expect the bulk of the 1 million tonnes to be supplied from Russia and other Black Sea regions,” a trader said.

“Some EU, possibly about 100,000 tonnes from Germany, could also be supplied if payment can be sorted out. There are also issues with the levels of bug (insect) damage in Russian wheat.”

Most of the purchasing was believed to have been undertaken by Iran’s state purchasing agency the Government Trading Corporation of Iran (GTC) with private buying reported for shipment across the Caspian Sea. (Reporting by Michael Hogan in Hamburg, Gus Trompiz in Paris, Polina Devitt in Moscow and Jonathan Saul in London; Editing by Veronica Brown/Jan Harvey/Jane Merriman)