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By Michael Hogan and Jonathan Saul
HAMBURG/LONDON, July 10 (Reuters) - Iran’s major grain buying campaign is continuing at a brisk pace, with traders reporting an almost half a million tonne wheat purchase this week, partly financed by frozen oil revenues in Iran’s overseas bank accounts.
The country’s state grains buying agency GTC bought about 450,000 tonnes of milling wheat for August shipment, European traders said.
This latest purchase, including of Russian and Baltic Sea origin, comes after Iran bought more than 800,000 tonnes last month in two weeks, ahead of the country’s elections.
Dealers said the wheat buying had partly been made possible by the use of money in Iran’s bank accounts in several countries which had been frozen by sanctions.
The European Union and the United States imposed sanctions aimed at discouraging Tehran’s nuclear programme. Iran insists that its atomic programme is for peaceful purposes.
While the sanctions do not target food or animal feed shipments, financial measures have frozen Iranian companies out of much of the global banking system, hindering payments.
But frozen bank accounts can now be used to pay for food and animal feed imports in a change from previous sanctions rules.
“The change is recent but it’s a significant change,” one trader said.
Iran’s purchases this week comprised some 250,000 tonnes of Russian wheat at around $295 c&f (cost and freight) and 200,000 tonnes of Baltic Sea region wheat, possibly from Poland, at around $305 a tonne c&f traders said.
Syria, also facing sanctions, has similarly started using money in frozen bank accounts to pay for food imports.
Iran, once a wheat exporter, is forecast to need at least 3 million tonnes of imports in the season starting in summer with grain traders speculating its harvest this year was not as good as hoped.
“I think Iran may in fact import between 5 to 6 million tonnes of wheat,” another trader said.
Neighbouring Pakistan, also a wheat exporter in the last few years, has also started wheat imports with market reports that its harvest is also disappointing. (Reporting by Michael Hogan and Jonathan Saul; Editing by Veronica Brown and Pravin Char)