Iran gobbles up U.S. wheat
March 20th, 2012
01:00 AM ET

Iran gobbles up U.S. wheat

By Tim Lister and Emily Smith CNN

Iran is buying American wheat for the first time in three years as it seeks to hedge against the growing impact of sanctions and weather-related crop shortages. Some 120,000 tonnes of hard red winter wheat grown in the Plains is on its way to the Islamic Republic, according to the U.S. Department of Agriculture. The sale of another 60,000 tonnes has been finalized, according to trade sources, and Iran may ultimately buy some 400,000 tonnes of U.S. wheat this year.

The purchases are part of a massive effort by the Islamic Republic to build up its grain stockpiles amid growing difficulties in financing imports of everything from steel to palm oil. At the same time, Iranian companies are devising elaborate workarounds to find new markets for crude oil exports.

Exports of U.S. wheat to Iran are legal. U.S. and European sanctions against Iran exempt agricultural products. The major U.S. commodity traders - Bunge, Archer Daniels Midland and Cargill - won't comment on whether they were involved in the deals, but Cargill told CNN that it "does sell agricultural commodities to Iran as food is specifically excluded from the sanctions" implemented because of Iran's nuclear program.

"We take great care to ensure that these sales respect both the spirit and the letter of the law while trying to make sure that ordinary people are not deprived of basic foodstuffs," a Cargill spokeswoman said.

According to USDA figures, 1,564,000 tonnes of U.S. wheat were exported to Iran in 2008, when the country was suffering a drought, and 312,000 tonnes the following year. Iran has also bought smaller amounts of U.S. soybeans and corn.

Once again, analysts say dry weather is in part driving the sales.

"Iran's appetite is driven by drought, a desire to build up grain inventories and hedging against the future impact of sanctions," says Shelley Goldberg, director of global resources and commodities strategy at Roubini Global Economics. "Inventories were getting quite low last year."

State-owned and private Iranian companies are devising ways to overcome the shortage of hard currency, using barter, gold and currencies such as the Indian rupee and Russian rouble. Traders say it also appears that Iran's Central Bank has stepped in, making foreign exchange available to facilitate imports.

Iranian importers are also looking to Pakistan for several hundred thousand tonnes of rice and wheat this year as part of a complex barter deal. Pakistan has a wheat surplus.

A spokesman at Pakistan's Ministry of Water & Power, Tanveer Alam, told CNN Monday that Pakistan was planning to export one million tonnes of wheat in exchange for iron ore and fertilizer.

Such elaborate deals are making up for difficulties with more conventional trade relationships. "Even though wheat and agricultural products are not targeted by sanctions, there is a growing reluctance to do business with Iran. It's a case of bad karma,' says Goldberg.

In recent weeks, several cargoes of grain destined for Iranian ports have been diverted to other countries because of payment problems, according to commodity traders. U.S. and European sanctions against some 30 Iranian banks have produced what financial sources call a "chilling effect" - with banks and currency dealers less willing to provide letters of credit for Iranian imports and exports.

Over the weekend, Iran was further isolated from the global financial system when many of its banks designated by European sanctions were blocked from using SWIFT, the messaging system that supports international bank transfers. Those banks include Mellat, Post, Saderat and Sepah as well as the Iranian Central Bank.

Israeli Finance Minister Yuval Steinitz was quoted in Israeli media over the weekend as saying that cutting off SWIFT was a "dramatic step that is liable to bring about the collapse of Iran's economy."

Trading and banking sources contest that view, saying Iran has proved ingenious at circumventing sanctions and mitigating their effect. They said it is by regional standards a diversified and self-reliant economy.

The Islamic Republic is also finding new destinations for its crude oil, although analysts speculate that it often has to sell at a discount to market rates. Shipping sources say Iran is increasing deliveries to Asian customers - especially in China, South Korea and India - as the European Union prepares to ban all imports and Japan diversifies its sources of crude.

The European Union ban comes into effect from July 1. But that ban, agreed in January, might yet be revised to provide Iran a significant loophole.

Originally it covered Iranian crude carried on any ship insured in the European Union. More than 90% of the world's oil tankers are covered through insurance "clubs" in London. But one reinsurance source in London says he expects the proposed sanctions to be diluted when EU foreign ministers meet later this week to exempt ships that are owned outside the European Union even if insured there. This would make it easier to move Iranian crude.

India has lobbied for a revision of the sanctions regime and made it clear that it will only abide by U.N.-mandated measures.

Chinese shippers have already made it clear that they will continue to take Iranian crude and if necessary seek other sources of insurance. About one-fifth of Iran's crude exports go to China. Hong Kong media quoted a senior official of the China Shipping Development Co. as saying Friday that the Chinese government would take measures to ensure the volume of oil imports from Iran would not drop.

Even so, financial sanctions against Iran continue to complicate the country's trade.

In Gulf trading houses, the unofficial value of Iran's rial has declined by half over the past year. Currency exchange firms in the Gulf emirates are reluctant to trade in the rial for fear of being tainted by association with banks sanctioned by the United States and European Union.

CNN's Reza Sayah contributed to this report

Post by:
Filed under: Security Brief
soundoff (675 Responses)
  1. tire stores in orange county ca

    bookmarked!!, I really like your blog!

    https://affiliates.streamray.com/p/offsite.cgi?https://theocrv.com/semi-truck-collision-repair-paint-shop-near-me-orange-county

    May 14, 2021 at 12:10 am | Reply
  2. Mercedes Sprinter Cowl Panel Rust Repair

    http://yellowpages.sooeveningnews.com/__media__/js/netsoltrademark.php?d=commercialvanrepairshop.com/ford-luxury-van-repair-shop-near-me

    May 13, 2021 at 8:56 pm | Reply
  3. furniture restoration orange county

    Everything is very open with a precise explanation of the issues. It was really informative. Your website is very useful. Thanks for sharing!

    https://uhr.rutgers.edu/download/135?url=http://youtube.com/watch?v=kLyR3-eSpI8

    May 13, 2021 at 8:20 pm | Reply
  4. reupholstery orange county

    &filename=rpn-calculator_0.9.0.wdgt.zip&project=RPN-Calculator

    May 13, 2021 at 6:24 pm | Reply
  5. nearest trailer repair shop

    Good post. I learn something new and challenging on sites I stumbleupon everyday. It's always exciting to read through content from other authors and use something from other web sites.

    http://gb-www.digitimes.com.tw/gate/gb/youtube.com/watch?v=B22mt-byN0M

    May 13, 2021 at 2:18 pm | Reply
  6. seats near me

    Pretty! This was an extremely wonderful post. Thanks for providing this information.

    https://dsu.regione.marche.it/Logout.aspx?Returnurl=https://ocrvcenter.biz/rv-repair-shop-noho-arts-district-california

    May 13, 2021 at 11:28 am | Reply
  7. repair rv toilet

    I would like to thank you for the efforts you have put in writing this website. I really hope to check out the same high-grade blog posts by you later on as well. In truth, your creative writing abilities has encouraged me to get my very own website now 😉

    https://sessionize.com/redirect/8gu64kFnKkCZh90oWYgY4A/?url=https://ocrv.life/motorhome-dent-repair-near-me

    May 13, 2021 at 8:15 am | Reply
  8. fiberglass store near me

    https://hr.pecom.ru/bitrix/rk.php?goto=https://

    May 13, 2021 at 5:43 am | Reply
  9. california horse trailers

    I really love your site.. Very nice colors & theme. Did you build this site yourself? Please reply back as I’m planning to create my very own blog and would like to know where you got this from or what the theme is called. Cheers!

    http://ecare.unicef.cn/edm/201208enews/url.php?url=https://theocrv.com/rv-repair-shop-inglewood-california

    May 13, 2021 at 5:00 am | Reply
  10. orange shop near me

    https://www.dmsg.de/externerlink.php$?url=https://ocrv.rocks/rv-upholstery-near-me

    May 12, 2021 at 9:40 pm | Reply
  11. RV Interior Designer Riverside

    https://www.kandsranch.net/__media__/js/netsoltrademark.php?d=www.yelp.com/biz/ocrv-center-anaheim-2

    May 12, 2021 at 8:54 pm | Reply
  12. the truck shop orange

    Good day! I just wish to offer you a huge thumbs up for your great information you have right here on this post. I'll be returning to your blog for more soon.

    https://schoo.jp/redirect?url=https://ocrvcenter.biz/rv-repair-shop-poway-california

    May 12, 2021 at 6:46 pm | Reply
  13. bus repair shops

    http://account.vfw.org/Authenticate.aspx?ReturnUrl=https://

    May 12, 2021 at 4:03 pm | Reply
  14. shop repair near me

    http://moe.gov.np/site/language/swaplang/1/?redirect=https://ocrv.life/shuttle-bus-collision-repair-shop-near-me

    May 12, 2021 at 11:32 am | Reply
  15. rv interior remodeling companies

    https://www.easytravel.com.tw/ehotel/hotel_sale.aspx?posvn=maple&url=https://youtube.com/watch?v=KLnLlPwDnwo

    May 12, 2021 at 10:10 am | Reply
  16. bus body repair

    There's certainly a great deal to learn about this subject. I love all of the points you made.

    http://www.cnxz.cn/redirect.php?url=https://ocrvart.com/rv-repair-shop-garden-grove-california

    May 12, 2021 at 9:27 am | Reply
  17. rv technician near me

    Great blog you've got here.. It’s hard to find excellent writing like yours nowadays. I really appreciate individuals like you! Take care!!

    https://getlink.pro/v/q9XxtBsSYXk

    May 12, 2021 at 8:28 am | Reply
  18. orange county collision center

    https://www.t10.org/cgi-bin/s_t10r.cgi?First=1&PrevURL=https://ocrvcenter.info/rv-window-repair-near-me

    May 12, 2021 at 7:56 am | Reply
  19. bucket truck repair near me

    https://aro.lfv.se/ViewSwitcher/SwitchView?mobile=True&returnUrl=https://ocrvmotorsports.com/rv-repair-shop-stanton-california

    May 12, 2021 at 6:00 am | Reply
  20. Mercedes Winnebago Sprinter Repair

    http://saveourseafarers.com/__media__/js/netsoltrademark.php?d=commercialvanrepairshop.com/semi-truck-upholstery-shop-near-me

    May 12, 2021 at 1:56 am | Reply
  21. RV AC Los Angeles

    https://skioregon.com/__media__/js/netsoltrademark.php?d=g.page/ocrvcenter

    May 12, 2021 at 1:16 am | Reply
  22. fiberglass repair shops

    http://www.bookmerken.de/?url=https://ocrv.world/rv-repair-shop-gardena-california

    May 12, 2021 at 1:12 am | Reply
  23. rv batteries near me

    You need to take part in a contest for one of the highest quality blogs on the internet. I'm going to highly recommend this site!

    http://account.vfw.org/Authenticate.aspx?ReturnUrl=https://ocrvcenter.co/tractor-truck-collision-repair-shop-near-me

    May 11, 2021 at 11:56 pm | Reply
  24. ocrv paint and service

    https://keyweb.vn/redirect.php?url=https://ocrv.me/cascade-collision-repair-shop-near-me

    May 11, 2021 at 7:16 pm | Reply
  25. Content Marketing Ideas

    I couldn’t resist commenting. Perfectly written!

    https://www.beautymex.com/__media__/js/netsoltrademark.php?d=callfeeder.com

    May 11, 2021 at 5:59 pm | Reply
  26. Social Media Marketing Pro

    Hello! I could have sworn I’ve been to this site before but after going through a few of the articles I realized it’s new to me. Nonetheless, I’m certainly pleased I found it and I’ll be book-marking it and checking back frequently!

    https://comtool.morinda.com/mailing/click/15230223?l=https://incomewolf.com

    May 11, 2021 at 5:47 pm | Reply
  27. Content Marketing Near Me

    Everything is very open with a really clear clarification of the challenges. It was definitely informative. Your website is extremely helpful. Thanks for sharing!

    http://www.davisbrodybond.org/__media__/js/netsoltrademark.php?d=bestservicenearme.com

    May 11, 2021 at 4:39 pm | Reply
  28. Internet Marketing Videos

    An impressive share! I have just forwarded this onto a colleague who had been conducting a little homework on this. And he in fact bought me dinner due to the fact that I found it for him... lol. So let me reword this.... Thank YOU for the meal!! But yeah, thanx for spending some time to talk about this issue here on your internet site.

    https://www.kimchiandchips.com/blog/?wptouch_switch=desktop&redirect=http3A2F2Fspokanevalleyseo.com

    May 11, 2021 at 1:56 pm | Reply
  29. Content Marketing Market

    http://www.gamemasti.com/__media__/js/netsoltrademark.php?d=www.affordableranking.com

    May 11, 2021 at 7:04 am | Reply
  30. Local Marketing Agencies Near Me

    I want to to thank you for this very good read!! I definitely loved every little bit of it. I have got you saved as a favorite to look at new things you post…

    http://www.yaesuusa.com/__media__/js/netsoltrademark.php?d=affordableranking.com

    May 11, 2021 at 5:24 am | Reply
  31. Google Marketing Experts

    http://www.home-chef.com/__media__/js/netsoltrademark.php?d=affordableranking.com

    May 11, 2021 at 3:52 am | Reply
  32. Internet Marketing Services

    Your style is very unique in comparison to other folks I've read stuff from. Thank you for posting when you have the opportunity, Guess I'll just book mark this web site.

    https://gold-trust.com/__media__/js/netsoltrademark.php?d=affordableranking.com

    May 11, 2021 at 3:48 am | Reply
  33. Internet Marketing Companies Near Me

    You made some really good points there. I checked on the web to learn more about the issue and found most people will go along with your views on this site.

    http://www.indian-wells.org/__media__/js/netsoltrademark.php?d=www.affordableranking.com

    May 11, 2021 at 12:43 am | Reply
  34. Internet Marketing Club

    An outstanding share! I have just forwarded this onto a colleague who was doing a little homework on this. And he actually ordered me dinner simply because I discovered it for him... lol. So let me reword this.... Thank YOU for the meal!! But yeah, thanx for spending some time to talk about this subject here on your blog.

    http://screwnetworksolutions.biz/__media__/js/netsoltrademark.php?d=affordableranking.com

    May 10, 2021 at 10:48 pm | Reply
  35. Video Marketing Jobs

    Pretty! This was a really wonderful article. Thank you for supplying these details.

    https://www.phys.sinica.edu.tw/library/Elsevier_notices.php?url=https://affordableranking.com

    May 10, 2021 at 9:50 pm | Reply
  36. Seo Marketing Experts

    https://www.longsdrugs.us/__media__/js/netsoltrademark.php?d=affordableranking.com

    May 10, 2021 at 5:10 pm | Reply
  37. Internet Marketing Consultant

    There's certainly a lot to find out about this issue. I like all of the points you made.

    http://generalbeer.com/__media__/js/netsoltrademark.php?d=affordableranking.com

    May 10, 2021 at 3:51 pm | Reply
  38. Digital Marketing Events Near Me

    This is a very good tip particularly to those new to the blogosphere. Brief but very accurate info… Thank you for sharing this one. A must read post!

    https://www.pharmacydepot.gr/BannerClick.php?BannerID=157&LocationURL=https://www.affordableranking.com

    May 9, 2021 at 8:56 pm | Reply
1 2 3 4

Leave a Reply to ME


 

CNN welcomes a lively and courteous discussion as long as you follow the Rules of Conduct set forth in our Terms of Service. Comments are not pre-screened before they post. You agree that anything you post may be used, along with your name and profile picture, in accordance with our Privacy Policy and the license you have granted pursuant to our Terms of Service.