Private Buyers in Iran Look to Boost Grain Market

Posted by Eric Haun
Monday, July 28, 2014

One sign of change in Iran as it works toward a nuclear deal with world powers is the way it is feeding itself, with private grain firms beginning a slow return to their traditional role as major food commodity importers.

Iran was never barred from buying food under sanctions imposed by the United States and the European Union over Tehran's nuclear activities.

But the measures have made trade more difficult for the past two years by hindering payments and ocean shipping, which has left the bulk of the work in the hands of state buyers such as the GTC and SLAL.

However, Tehran has won limited relief from the sanctions after agreeing to curtail its nuclear activities, most recently including access to $2.8 billion of its cash frozen abroad and there are some signs of change in its food imports, trade sources say.

Though most sanctions against Tehran remain in place and financing is expected to stay difficult, officials have spoken in principle of giving the private sector a larger role as President Hassan Rouhani looks at steps to liberalise the economy.

"Unlike in the area of foreign policy where the president's room for manoeuvre is heavily restricted, the scope for shaping an independent economic policy is substantial," said Torbjorn Soltvedt of risk consultancy Maplecroft.

Trade sources say private grain companies in Iran have begun making regular enquiries for grains including corn and animal feed.

Freight orders seen by Reuters showed private buyers seeking volumes sought of between 12,000 and 25,000 tonnes.

"We are receiving enquiries every day from them. Business is still difficult, but in the past couple of years it was almost impossible for private buyers," one source said.

Another trade source added: "The private sector is more nimble and are able to conclude purchases more easily. Of course, they buy smaller quantities."

An Iranian commodities trade source estimated private buyers have imported 1.5 million tonnes of animal feed since March.

"We should see them in the market all year," one European trade source said.

Iran is the Middle East's second-largest grain importer after Saudi Arabia and according to trade sources is seeking to import four to six million tonnes of wheat this season.

In the year to June, Iran's grain imports were estimated at 11.7 million tonnes by the International Grains Council including 6 million tonnes of wheat, 5 million tonnes of corn, and 700,000 tonnes of barley.

Caspian Shipments
Trade sources estimated GTC had purchased 2 million tonnes of wheat since March.

A European source said 1.2 million tonnes had been bought from Australia with the remainder from Germany, Lithuania, Poland and Russia.

Traders expect GTC and SLAL to remain Iran's main grain buyers in the near-term as these agencies still have better access to foreign currency reserves than private traders.

"The central bank decides on allocations as it has access to the foreign exchange reserves. GTC has priority as there is not enough foreign exchange for the privates," one Iranian commodities source said. "The private sector ... is only able to do small parcel trades."

Still, private buyers have been picking up cargoes from Kazakhstan and Russia and shipping them over the Caspian Sea, traders said.

They said around 20,000 tonnes to 30,000 tonnes of grain a week is shipped using this route during warmer months from the Volga River and then onto Iran via the Caspian Sea.

"This has become a lucrative trade, albeit of small volumes. Vessels used will carry up to 4,800 tonnes of grain along this route due to draft restrictions," a European trade source said.

In the past Iran depended on foreign ships for much of its imports, but now relies more on its own commercial fleet and even land routes due to the impact of sanctions.

Traders sources in May reported hundreds of thousands of tonnes of grain and sugar were stuck in transit due to payment problems.

(
By Michael Hogan, Jonathan Saul and Sarah McFarlane; Additional reporting by Parisa Hafezi in Ankara; editing by Jason Neely)

Maritime Reporter August 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

All Set for the Long Beach Arts Month

A gala reception Saturday, Oct. 4, will kick off a month-long art exhibition showcasing the Port of Long Beach in images captured by professional and amateur photographers.

MOL Restructures Asia to S. Africa Service

Mitsui O.S.K. Lines, Ltd. (MOL) announced the restructuring of its existing Asia to South Africa liner services into two direct loops. One service will call South China,

Norvestor to Become PG’s Largest Shareholder

Norvestor VI, L.P., a fund advised by Norvestor Equity AS, announced it has signed an agreement to invest in Ing Per Gjerdrum AS including its subsidiaries PG Hydraulics AS and PG Construction AS.

News

Steel Cut for Yamal LNG Project’s Lead Tanker

A steel-cutting ceremony was held on September 29 for the lead gas tanker ordered by SCF Group for transportation of liquefied natural gas (LNG) under the Yamal LNG project.

All Set for the Long Beach Arts Month

A gala reception Saturday, Oct. 4, will kick off a month-long art exhibition showcasing the Port of Long Beach in images captured by professional and amateur photographers.

'Flag Zannis' Delivered

The Board of Directors of COSCO Corporation (Singapore) Limited announced that COSCO (Dalian) Shipyard Co., Ltd ("COSCO Dalian"), a subsidiary of the Company's 51% owned COSCO Shipyard Group Co.

Logistics

MOL Restructures Asia to S. Africa Service

Mitsui O.S.K. Lines, Ltd. (MOL) announced the restructuring of its existing Asia to South Africa liner services into two direct loops. One service will call South China,

DMR Examines Container Terminal Congestion Issues

Container port congestion has been hitting the headlines recently, but the reasons for it vary widely and in many cases it is only a short term issue. Certain world

Signet Transports Second LLOG Rig to GofM

On September 14, five Signet Maritime ASD/Z-Drive tugboats, the SIGNET ENTERPRISE, SIGNET RELIANCE, SIGNET MAGIC, SIGNET WEATHERLY, and SIGNET VOLUNTEER successfully

 
 
Maritime Careers / Shipboard Positions Maritime Contracts Naval Architecture Navigation Offshore Oil Pipelines Port Authority Ship Simulators Shipbuilding / Vessel Construction Sonar
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1388 sec (7 req/sec)