* Trade finance freeze hurting food imports
* Tehran stockpiling food to avoid unrest
(Adds further comment, detail, background)
By Jonathan Saul and Michael Hogan
LONDON/HAMBURG, April 13 Private importers in
Iran have bought about 50,000 tonnes of feed wheat this week
despite payments problems caused by Western sanctions on the
Islamic Republic, trade sources said on Friday.
Food shipments are not targeted under Western sanctions
aimed at Iran's disputed nuclear programme, but financial
measures have frozen Iranian firms out of much of the global
banking system, hindering grain buying.
Iranian farmers face a shortage of feed for their huge
livestock flocks as private-sector grain importers have been
unable to arrange large-scale payments, traders said earlier
Nevertheless, private buyers picked up two feed wheat
consignments of 25,000 tonnes for prompt shipment this week.
"The deal has been wrapped up, and it looks like it is being
done in two shipments to break up the purchases," a European
trade source said.
The origin of the grain was unclear, but it was thought
likely to be shipped via a Black Sea port.
"We may be seeing some attempts to bundle shipments using
advance payments," another trade source said. "The Iranian
private feed importers have a large requirement, and unless
their government steps in they will be facing problems."
The government, which bought more than 2 million tonnes of
bread-quality wheat recently, is now poised to start buying
hundreds of thousands of tonnes of feed grain, because trade
financing problems have meant private buyers have been unable to
conclude large deals, traders said.
"Some buyers are seeking purchases by paying in advance or
other currencies, and private buying is taking place," another
European trader said. "I think the volumes being bought of feed
grains are still way below Iran's requirements."
Traders said they expected Iran's government feed agency
SLAL to step into international markets and start buying feed
grain in the same way that state food agency GTC moved earlier
this year to secure bread wheat supplies.
Iran has a large livestock farming sector and requires
massive imports of meat and other foodstuffs to meet the needs
of its population. According to data from the United Nations'
Food and Agriculture Organisation, Iran in 2010 produced 1.6
million tonnes of chicken meat, 6.3 million tonnes of cow milk
and a combined 0.91 million tonnes of beef, lamb and goat meat.
Sanctions are worsening an economic crisis that has caused
rising prices, shortages of some goods and a collapse of the
local currency, while other countries in the Middle East are
experiencing political and social unrest.
"(Iranian President Mahmoud) Ahmadinejad may be the first to
suffer from any disruption to food supply," said Alan Fraser,
Middle East analyst with security firm AKE. "The regime clearly
envisages tougher times ahead, and its major priority will be to
dampen any forms of dissent."
Iran has aimed to sidestep the banking freeze by using other
financing mechanisms, including routing deals through Turkish
banks and making payments in non-dollar currencies such as
A Swiss bank owned by India's Hinduja Group said this week
it was continuing food trade finance with Iran despite the
"While the current sanctions could really bite, there has
been a reluctance to take the steps that would make it so. Part
of this is prudent concern about not pushing too far, too
quickly partners whose aid is needed on other fronts such as
Turkey, which is critical to any resolution of the Syrian
crisis," said J. Peter Pham, a director with U.S. think-tank the
Israel, widely believed to be the Middle East's only nuclear
power, and the United States, its main ally, have both held out
the prospect of military action against Iran if sanctions do not
work. Iran has said it is enriching uranium for peaceful
Officials from Iran and the six major powers arrived in
Istanbul ahead of Saturday's bid to restart stalled diplomacy
following months of soaring tension.
(Reporting by Jonathan Saul and Michael Hogan, editing by Jane