Iran buys US wheat worth $46 million
Washington, March 2, 2012
Iran has made a rare purchase of US wheat in an effort to build food stockpiles as the US and Europe implement tough new sanctions to contain Tehran's nuclear ambitions.
The US Agriculture Department reported on Thursday that Iran bought 120,000 tonnes of US wheat -- enough to fill two large cargo ships.
While not illegal, the deal caught traders by surprise as tensions mount between the West and Iran on concerns the Islamic Republic was intent on developing a nuclear weapon.
'It shocked me,' said Jerod Leman, a broker with Wellington Commodities Corp. 'With everything going on over there with their nuclear problems, I am surprised we sold them anything.'
Western sanctions against Iran are making it increasingly difficult for the country to pay for staple foods, causing hardship for its 74 million people. Because of the tightening financial noose, Iran has resorted to bartering, including swapping gold or tankloads of oil for food, according to commodity traders.
In the last month, Iran has bought or tried to buy nearly 3 million tonnes of wheat on fears sanctions will disrupt imports and cause bread shortages that could spark food riots.
Iran has asked to import a million tonnes of wheat from Pakistan in a barter deal and also approached India.
The Islamic Republic has also bought nearly 2 million tonnes in February from Russia, Germany, Canada, Brazil and Australia.
'It's a sign that they really need wheat,' said a trader from Louis Dreyfus. Traders were unable to confirm which grain company sold the wheat to Iran, but suspected major grain companies such as Cargill Inc, Bunge Ltd or Archer Daniels Midland. ADM and Bunge did not respond to inquiries seeking comment and Cargill said they do not comment on market rumors.
Iran last purchased US wheat in 2009 but Thursday's sale would be the largest US wheat sale to the country since August 2008, a year when severe drought halved the country's domestic crop and triggered record imports, according to USDA data. - Reuters
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