March 2, 2012

US exporters sell new record wheat to Iran

Since August 2008, US exporters had sold the most wheat to Iran, the government said, boosting speculation that the Persian Gulf country may be raising supplies after last year's output weakened.

The sale of 120,000 tonnes of hard, red winter wheat is for delivery in the marketing year that ends May 31, the USDA said today in an e-mailed statement. The sale was the biggest since Iran purchased 689,310 tonnes in a deal announced on August 15, 2008. The US hasn't exported any wheat to Iran since a 54,267-tonne shipment was sent in November 2009, USDA data show.

Iran's production of wheat, the country's biggest crop, fell to 13.75 million tonnes in 2011, 13% less than a year earlier, the USDA estimates. While Iran is facing international sanctions over its nuclear program, US restrictions provide exemptions for "licensed exports of agricultural commodities," according to the Office of Foreign Assets Control, a division of the Treasury Department.

"If Iran is concerned about commerce or shipping, any of those kinds of things, as a result of sanctions or something worse coming about, having adequate stockpiles of food in the country may be an appropriate thing to do," Vince Peterson, a vice president of overseas operations for US Wheat Associates, a trade group focusing on developing export markets, said.

The US and Europe are moving to block Iranian oil sales and transactions with its central bank. The US and Israel say they haven't ruled out using force to stop Iran from obtaining nuclear weapons. The Islamic republic says its atomic program is peaceful and legitimate under international agreements. Iran holds parliamentary elections tomorrow.

Crude-oil futures for April delivery rose 1.7% to US$108.84 a barrel at 2:29 p.m. today on the New York Mercantile Exchange, up 11% this year. Wheat futures slid 0.6% to US$6.64 a bushel on the CBOT, after climbing as much as 0.7%.

Iran may have purchased as much as two million tonnes of wheat in the past month from international suppliers, Peterson said by telephone from Arlington, Virginia. Arkady Zlochevsky, the president of Russia's Grain Union, said February 22 that the country may deliver one million tonne of grain to Iran. Industry officials in India also have discussed selling wheat to Iran, the Wall Street Journal reported February 28, citing unnamed sources.

The US exported US$53.035 million in agricultural products to Iran last year, the least since 2006, USDA data show.