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Current Position:Home » News » Agri & Animal Products » Cereal Crops » Topic

Iran seeks U.S. wheat despite nuclear tension

Zoom in font  Zoom out font Published: 2013-03-14  Origin: Reuters  Views: 14
Core Tip: Iran's state intended to buy around 110,000 tonnes of U.S.-origin milling wheat, traders said, even as the United States and Europe impose tougher sanctions to stem Tehran's nuclear programme.
Iran's state grain buyer has been in talks with export houses aimed at buying around 110,000 tonnes of U.S.-origin milling wheat, traders said, even as the United States and Europe impose tougher sanctions to stem Tehran's nuclear programme.hard red winter wheat

Iranian wheat imports are traditionally handled by the private sector and government, but the state has taken a bigger role with purchases in the past year after disruption to trade finance caused by toughened Western sanctions targeting the country's disputed nuclear programme.

Sanctions do not stop food shipments but they make it difficult for Iranian importers to obtain letters of credit to finance purchases or conduct international transfers of funds through banks.

"There is no confirmation that a sale has been made but there were negotiations about wheat for April shipment," one trader said.

"There is truth to it... two panamaxes for April," said a U.S.-based wheat exporter, referring to 55,000- to 60,000-tonne vessels. But his comment could not be confirmed by a second U.S. source.

One European trader said Iran's state Government Trading Corporation (GTC) had been seeking 110,000 tonnes of U.S. hard red winter wheat in two 55,000 tonne consignments.

Another trader said: "U.S. wheat is about the cheapest in the world and this is attracting the Iranians, at least 100,000 tonnes has been spoken about in the last week."

Iran's GTC has been quietly contacting trading houses directly for offers rather than issuing purchase tenders for wheat.

Iran had previously made large purchases of U.S. wheat in March 2012 despite the political tension.

It also recently made big purchases of wheat from Germany and Australia along with large purchases of soymeal from Argentina and India.

"It's unusual for them to buy from the U.S. Even before the sanctions, they were not consistently in the market for U.S. wheat and, in fact, for wheat in general," said Steve Mercer, vice president of communications with the U.S. Wheat Associates, an industry group focused on developing international markets.

"It's not a market that we rely on, but we have the wheat to sell and the sanctions allow the sale of food."

Iran has purchased about 3.5 million tonnes of wheat on the world market in the current marketing year, but only about 60,000 tonnes of that was from the United States, Mercer said.

In the 2011/12 (June/May) season, Iran imported about 263,000 tonnes of U.S. hard red winter wheat in the largest purchases from its rival in three years, according to U.S. Agriculture Department data.

U.S. wheat export premiums were firm this week, with basis offers for spot shipments of HRW wheat at the Gulf Coast hovering near historic highs, partly due to solid near term export prospects.

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