Tuesday 19 February 2019

Iran buys 85,000-tonnes wheat in first deals for weeks

LONDON, March 6, 2015

Private Iranian companies have bought about 85,000 tonnes of wheat to be sourced from the European Union and Black Sea regions in their first purchases for several weeks, European traders said on Thursday.

The grain was for March shipment and comprised 60,000 tonnes from Germany and the Baltic Sea region and a further 25,000 tonnes from the Black Sea area, traders said.

"We are seeing considerable demand from Iranian private buyers for EU/German, Baltic Sea and Australian wheat," one trader said. "High Iranian domestic prices are generating import demand."

Iran last reportedly purchased significant quantities of wheat at the end of 2014.

An international commodities trade source active in the Iranian market said: "This is most likely to be initial cargo demand by Iranian buyers who are also gauging market pricing after being relatively quiet for a while."

"Iran has large import requirements. The payment situation is still in question given the issue over whether they will reach a nuclear deal, which would free up the banking system."

Iran was never barred from buying food under Western sanctions over its disputed nuclear programme, but EU and US financial measures have made trade more difficult in past years by hindering payments and ocean shipping.

Iran and world powers are trying to put a framework agreement about Iran's nuclear programme in place by the end of the month, despite the misgivings of Israel, US congressional Republicans and some Gulf Arab states. Such an accord could be followed by a comprehensive agreement to be completed by the end of June.

"Iranian state buyers are currently out of the market, I think the state buyers might return after mid April after the holidays for the Iranian new year are over and when their budgets for the new year will be allocated during this period of low oil prices," another trader said.

"Payment from private sector buyers is becoming less of an issue."

Iran's domestic agricultural support programme means domestic wheat prices are around $330 a tonne.

"This is higher than international levels and currently makes it worthwhile to import both for domestic consumption and for export of wheat flour," he said.

Private Iranian companies are exporting about 150,000 tonnes of wheat flour per month to countries such as Iraq, Afghanistan, the United Arab Emirates and other Gulf states, traders said in November.

"There is a currently lot of demand from Iranian private buyers and some trading houses may be combining loads into large shipments," the first trader said. - Reuters

Tags: Iran | EU | wheat | Purchase | Black Sea |

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