Iran has bought up to 100,000 tonnes of Indian raw sugar in rare deals as a wider number of foreign suppliers aim to sell Tehran agricultural commodities after last month's nuclear deal.

Trade sources said Iran in recent weeks had picked up cargoes of Indian raw sugar for shipment in early 2014, which total around 100,000 tonnes.

"India does not have a need for some of their own surplus sugar. So there is a window to shift some of that to Iran," one trade source said.

"The freight is cheap at below $10 a tonne, and some of the consignments (of Indian raw sugar) are moving to Jebel Ali (in the United Arab Emirates) and then onto Iran. Bear in mind this is being transported in small containerised cargoes."

Indian sugar exporters are aiming to fend off competition from rival producers Brazil and Thailand to supply markets such as Iran and Dubai's Al Khaleej refinery, with a freight advantage due to closer distances.

Besides shipping the raw sugar to the UAE and then onto Iran, India will transport some of the cargoes directly to the Islamic Republic, a ship order showed this week.

"(Iran's state buyer) GTC is signalling more interest for raw sugar cargoes, with more buying to come," another trade source said.

Iranian buyers are believed to be using Indian rupees acquired from selling crude oil to India, trade sources said.

Indian millers were unlikely to sell sugar to Iran at the current depressed prices as benchmark raw sugar futures hit a three-month low of 16.45 cents a lb on Tuesday, pressured by weak physical demand and ample global supplies.

ICE March raw sugar futures were down 0.04 cent or 0.2 percent to 16.47 cents a lb on Thursday.

Abinash Verma, director general of the Indian Sugar Mills Association, said late last month Indian mills would require raw sugar prices of around 19 cents a lb to make a profit.

Analysts expect India to be a net exporter of sugar in 2013/14, selling at least 1.5 million tonnes and possibly more than 2 million depending on price movements in coming months.-Reuters