June 11, 2015
Slow wheat imports into Iran in light of adequate supplies and nuclear talks
Following Iran's buying frenzy towards the end of 2014 which took over half a million tonnes of wheat from international markets, importation of the crop into the country is expected to sedate in light of ample supplies and the uncertainty of Tehran's nuclear talks.
"They have been boosting reserves of every major food item," Merzad Jamshidi, the chief executive of Khousheh Fars Flour (KFF) Mills, told Reuters. "So imports will be lower, maybe, three million tonnes of wheat imports (into March 2016)."
In the meantime, Iran is involved with six other nations in an ongoing process of resolving differences over Tehran's controversial nuclear programme before a June 30 deadline imposed by the Iranians.
While Western sanctions over the nuclear programme does not prevent Iran from buying food, the measures had an adverse effect on trade by constraining payments and ocean shipping.
"Everything to do with Iran is problematic," Jamshidi added, claiming that "banks and companies decided to walk away", as a result.
In addition, Iran is also coping with a serious water shortage. Hence, Jamshidi suggested that the best option would be to focus on obtaining wheat from overseas instead of relying on local crops. This would be beneficial for KFF Mills as well as over 300 mills in Iran, currently under government subsidies.
"We (KFF) will do about 800 tonnes a day, which works out at 250,000 tonnes of flour a year. Previously, it was 120,000 tonnes of flour," Jamshidi commented on KFF's increased capacity of flour milling.
In the Iranian fiscal year to March this year, the country brought in an estimated five million tonnes of wheat, Jamshidi said.
Iranian wheat output for 2015-16 recorded an estimated 13.8 million tonnes, a volume that reigned over 13 million tonnes for 2014-15, according to the International Grains Council (IGC). The council also anticipated six million tonnes of imports in 2015-16, the same volume as 2014-15.
