US grain exporters expect Iran to buy more US corn in the coming months after the Middle East nation made its first purchase in almost three years this week. The US Department of Agriculture stunned traders this week with its announcement that Iran had bought 240,000 tonnes of US corn for delivery in the 2007/08 marketing year, which starts September 1.
Iran has come under international sanctions since 2006 because of its nuclear program, but the United States makes exceptions for food products such as corn, traders said. "There's a world wide deficit of feed grains and we're going to do more business," said John Crabb of TradeWest Brokerage Co "There's a tremendous amount of demand out there."
The United States is the world's largest producer and exporter of corn. Iran last bought US corn in the 2004/05 crop year, when it purchased about 60,000 tonnes. It bought more than 600,000 tonnes in 2000/01, according to USDA records.
Iran normally buys corn from Brazil, where prices have risen sharply amid strong demand in the European Union for non-genetically modified corn. Much of the corn grown in the United States is genetically modified.
"Iran saw a tremendous arbitrage opportunity selling non-GMO Brazilian corn to the EU and replacing it with US corn," said Gavin Maguire, grain analyst at Iowa Grain. "Iran doesn't have any particular issues with genetically modified crops." Iran may have sold as much as 350,000 tonnes of Brazilian corn to Europe, Maguire said.
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