July 1, 2011

Iran to export two million tonnes of wheat

Iran plans to export two million tonnes of wheat in the current Iranian calendar year after a cut in government subsidies reduced domestic consumption of the grain, said Economy and Finance Minister, Shamseddin Hosseini.

Iran had no wheat exports in the previous year and forecasts an increase in output beyond the 15 million tonnes produced last year, he said, without giving an amount.

"Our agricultural sector will experience a better situation," Hosseini said in Jeddah, Saudi Arabia, where he was attending the annual meeting of the Islamic Development Bank. "We increased the price of wheat 30 times. Previously, lots of wheat and flour was destroyed and wasted in the country" or was smuggled out, he said.

Iran is grappling with international economic and financial sanctions over its nuclear development and the implementation of a five-year programme that began in December to phase out energy and food subsidies.

Iran is targeting economic growth of 6% in the Iranian year that began March 21, he said. Inflation will continue to accelerate until November, from 14.2% last month, though there are no immediate plans to further reduce the subsidies for consumers, he said. Non-oil exports will increase, he said.

The country's domestic wheat consumption is expected to drop to 6.4 million tonnes in the current Iranian year from 8.7 million tonnes the previous year, following a cut in subsidies in December, said Deputy Commerce Minister Hamid Alikhani.

The government paid some IRR40 trillion (US$3.7 billion) a year in bread subsidies, Alikhani said, according to the Tehran- based newspaper. The start of a five-year plan to phase out subsidies including on wheat will increase competitiveness in flour and bread production and reduce bread waste, he said.