February 17, 2012

 

Iran snaps up 500,000 tonnes of soft wheat

 

 

Iran bought up to 500,000 tonnes of soft wheat this week, bringing its total purchases to 1.1 million tonnes for February-April shipments, according European traders on Thursday (Feb 16).

 

The purchases included 420,000 tonnes of German origin wheat, 300,000-360,000 tonnes of Canadian origin, 240,000 tonnes of Brazilian origin and 200,000 tonnes of Australian origin wheat, the traders said.

 

Traders declined to give price ranges for the purchases.

 

Of the total, 600,000 tonnes purchased by Tehran had already been reported by Reuters last week.

 

At least two giant US trading houses were involved in the deals, traders said.

 

US agribusiness giant Cargill said last week it planned to continue grain shipments to Iran despite signs the Islamic Republic was struggling to process payments as trade sanctions bite.

 

Traders said Iran had succeeded in finding a way to pay for the wheat which did not involve barter transactions offering gold bullion or tanker loads of oil.

 

New sanctions imposed by the US and the EU to punish Iran for its nuclear programme do not bar firms from selling Iran food but they make it difficult to carry out the international financial transactions needed to pay for it.

 

"They have found a way (to pay) using credit letters," one trader said, adding that this had allowed Iran to address the line-up of ships waiting to deliver their products.

 

"They are now paying," the trader added.

 

Iranian traders are in talks with Russian sellers over the import of grain paid for in roubles which will bypass western banking sanctions imposed on the Islamic Republic, trade sources said on Thursday.

 

Iranian buyers are also in talks over importing corn via Iraq, avoiding payment restrictions by arranging supply to a third party for onward delivery, traders added.