UPDATE 1-Ukraine says private firms mull more food sales to Iran

Wed Mar 20, 2013 8:14am EDT

(Adds comments, details)

By Pavel Polityuk

KIEV, March 20 (Reuters) - Ukrainian private companies are considering an increase in their food exports to Iran despite payment problems caused by international sanctions against Tehran, Ukraine's agriculture minister said.

"Iran's Deputy Economy Minister visited Kiev some time ago and we are considering increasing the shipments (of food). It is not the government, but private companies," Mykola Prysyazhnyuk told Reuters on Wednesday.

The minister said that such shipments by private companies were already under way, adding that there were no barter deals with Iran but "direct payments".

He declined to give details of how Iranian consumers pay for Ukrainian produce.

Private companies control more than 80 percent of overall Ukrainian grain exports, although their share is due to decrease in the coming season as state-controlled companies plan to boost grain exports.

Last year Ukraine exported grain to Syria via a state company.

The European Union and the United States have imposed toughened sanctions meant to discourage Tehran's nuclear programme, which they say is has a military purpose.

The Western sanctions do not target food shipments, but financial measures have frozen Iranian firms out of much of the global banking system, complicating payments for imports on which Iran relies for much of its food, consumer and industrial goods.

Many foreign companies, including shipping firms, have pulled out of trade with Iran for fear of losing business in the United States and due to the complexities of arranging non-sanctioned deals.

Prysyazhnyuk did not say exactly when the Iranian official had visited and did not name him.

The minister said future Ukrainian exports to Iran might include nine types of food commodities, including grain, flour and sunflower oil.

Ukraine, a leading exporters of sunflower oil, maize, wheat and barley, exported 155,500 tonnes of barley, 2,835 tonnes of millet, 92,580 tonnes of sunoil and 155,200 tonnes of maize to Iran so far the 2012/13 July-June season, according to data from analyst UkrAgroConsult.

"We see Iran as the market for many types of food, not only for grain," Prysyazhnyuk said.

Ukraine exported 1.7 million tonnes of maize, 117,800 tonnes of barley and 148,000 tonnes of sunoil to Iran in 2011/12. (Reporting By Pavel Polityuk; Editing by Veronica Brown and Anthony Barker)

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