Iran's state grains buyer GTC swept back into international markets, picking up more than half a million tonnes of European origin wheat as expectations for its domestic crop were pared back, dealers said on Thursday. While precise payment details - including currency denomination - were not immediately available, the purchases are said to include a premium due to sanctions hindering Iran's payments for imports.
Dealers said Iran bought around 600,000 tonnes of milling wheat from the Baltic Sea region and Germany in the last two weeks, including around 200,000 tonnes purchased on Monday. "I think the total purchases are around 600,000 tonnes including the earlier 200,000 tonnes and that we will see more wheat purchases from Iran in coming months because of the uncertain crop outlook there," one European trader said.
Shipment for the 12.5 percent protein wheat was July, August and September, traders said. The European Union and the United States have imposed sanctions aimed at discouraging Tehran's nuclear programme. Iran insists that its atomic programme is for peaceful purposes Western sanctions do not target food or animal feed shipments, but financial measures have frozen Iranian companies out of much of the global banking system, hindering payments for imports. Traders are able to continue food deliveries to Iran using non-dollar payments.
Germany has been one of Iran's top suppliers, exporting 1.087 million tonnes of wheat between July 2012 and the end of March 2013, figures from the German statistics agency showed last month. The International Grains Council (IGC) currently forecasts Iran's imports would fall to 3.1 million tonnes in 2013/14 from 5.1 million tonnes in the previous year when the country added to its wheat stocks.