Iran starts feed grain imports as sanctions bite

Reuters News
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Posted: Apr 18, 2012 7:45 AM
Iran starts feed grain imports as sanctions bite

By Sarah McFarlane

LONDON (Reuters) - Iran state feed agency SLAL is tendering to buy corn and soybean meal, European traders said on Wednesday, needed to feed the country's large livestock herds as private importers struggle with trade financing due to Western sanctions.

The purchase tender for 150,000 tones of corn and 100,000 tones of soybean meal grain was for shipment in May/June, and the closing date for offers was said to be early next week, the traders added.

Western sanctions, aimed at Iran's disputed nuclear program, do not target food shipments, but financial measures have frozen Iranian firms out of much of the global banking system.

Sanctions are making it difficult for importers to obtain letters of credit or conduct international transfers of funds through banks.

SLAL was expected to start buying hundreds of thousands of tones of feed grains, traders told Reuters last week.

The latest tender also reflects a shift in focus after state food agency GTC bought more than 2 million tones of milling wheat in March, building up stocks after private buyers were hit by the trade finance squeeze.

The Iranian government bought wheat on international markets at a frantic pace in March, snapping up 2.5 to 3 million tones of bread wheat at a premium to global prices as private Iranian flour mills found they could not purchase in the face of toughened western sanctions.

Traders said the state food agency GTC was checking milling wheat prices on a weekly basis and could yet make additional purchases of food wheat as well.

(Additional reporting by Michael Hogan; Editing by Veronica Brown and Jane Baird)