September 17, 2013

Iran may buy 7.5 million tonnes wheat to boost reserves

Iran's deputy industry minister Abbas Qobadi says that the country plans to import 7.5 million tonnes of wheat.

According to President Hassan Rohani, the country should have strategic reserves of wheat.

The guaranteed price for buying wheat from domestic farmers was recently raised by the administration from IRR8,000 (US$0.32) to IRR10,500 (US$0.42). However, bread prices will not be increased, Qobadi noted.

He added that by the end of the current Iranian calendar year (March 20, 2014), it is predicted that five million tonnes of wheat will be imported. Iran has purchased twice the amount of wheat from domestic farmers to 4.1 million tonnes. Some 500,000 tonnes is projected to be bought by the end of the harvest season, he added.

Iran is facing a budget deficit for purchasing wheat from domestic farmers at guaranteed prices and this issue could harm wheat production in the country, according to Iranian agriculture ministry official Delavar Heidarpour.

Wheat farmers are disinclined to sell their output to state buyers as the administration pays less than the figure it pays for importing from abroad. About 2.44 million tonnes of wheat was purchased from farmers at IRR7,200 (US$0.29) per kilogram, Qobadi noted.

Iran's wheat harvest is almost completed and may total about 14.5 million tonnes, up 5% from the 13.8 million tonnes gathered a year earlier, the FAO said. Total grain production may be 21.85 million tonnes, up 3.4% from a year earlier including 3.2 million tonnes of barley and 2.4 million tonnes of rice.