* Doubts about Pakistan wheat barter deal
* Import need for corn, vegetable oils seen
By Jonathan Saul and Michael Hogan
LONDON/HAMBURG, April 5 Iran is at risk of a
poor grain crop which could force it to look for more wheat
imports in coming months as Western sanctions already disrupt
its food imports, traders said on Thursday.
Iran bought wheat on international markets at a frantic pace
in March, ordering a large part of its expected yearly
requirement in a little over one month.
It paid a premium in non-dollar currencies to work around
Though food shipments are not targeted under Western
sanctions aimed at Iran's disputed nuclear programme, financial
measures have frozen Iranian firms out of much of the global
Its purchasing has trickled to a halt in the past week after
it bought between 2.5 to 3 million tonnes on international
markets, with some payments routed via Turkey to get around the
But more purchasing is expected given mounting signs of a
poor crop and doubts about whether Pakistan can follow through
with a mooted grain-for-oil barter deal.
"Faced with continued turmoil in its Middle East
neighbourhood, the prospect of tightening sanctions, and perhaps
even an attack on facilities linked to its nuclear programme, it
would be surprising if the Iranian regime were not increasing
its food stockpiles," J. Peter Pham, a director with U.S. think
tank the Atlantic Council said.
Traders said it would just be a matter of time before Iran
started major wheat buying again.
"They will be forced to purchase more wheat ... the vast
majority of Iranian wheat areas have only received 25 to 75
percent of normal rainfall levels in the last 3 months. This is
similar to the pattern of the 2007/08 where imports were
eventually 8 million tonnes," one grain trader said.
Iran's harvest is approaching and the state purchasing
agency GTC will want to see harvest results before making more
purchases, traders said. The huge wave of recent purchases are
also being processed.
There were seven dry bulk vessels anchored outside Bandar
Imam Khomeini, one of Iran's largest grain terminals, AIS ship
tracking data on Reuters showed on Thursday. That was down from
12 two weeks ago.
Three were larger ships known as panamaxes, which can carry
around 60,000 tonnes of grains. In recent days, nine vessels
including five panamax have left the port area, suggesting over
300,000 tonnes had been discharged.
PAKISTAN DEAL QUESTIONED
The International Grains Council this week raised its
forecast for Iran's wheat imports in 2011/12 to 3.0 million
tonnes, up from a forecast of 1.0 million.
"I believe they will be a buyer of 4-5 million tonnes for
the 2012/13 marketing year in addition to purchases made this
year," the trader said.
Doubts are also being expressed about a barter deal in which
Pakistan agreed to supply a million tonnes of wheat to Iran.
"I think the (Pakistan) deal is not final yet and there are
lot of possibilities that it will not happen until the banking
side can be addressed," another trade source said. "The wheat is
not likely to be the best quality."
Another trade source added: "Barter deals were announced
with both India and Pakistan but both countries are notorious
for slow decision-making and long negotiations on deals. If Iran
gets enough wheat elsewhere it may dump the barter deals."
Sanctions are worsening an economic crisis which 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.
Both Israel, widely believed to be the Middle East's only
nuclear power, and its main ally, the United States, have held
out the prospect of military action against Iran if sanctions do
not work. Iran has said it is enriching uranium for peaceful
"While the conventional wisdom is that an attack would
result in a surge of Iranian nationalism ...if basic staples
become scarce and the conditions of life became even more
challenging for ordinary Iranians, it is just as likely that,
after the initial burst of patriotism, there would be a cascade
of recriminations on Ahmadinejad and the mullahs," the Atlantic
Council's Pham said.
Kazakhstan on March 28 was reported to have started
shipments of wheat in deals paid with cash in advance.
Turkish and Chinese involvement in payment for Iranian grain
imports are also increasingly spoken of.
"We see enquiries from smaller Turkish companies who have
been trying to buy in the open market on behalf of Iran and are
acting as conduits and they are still able to get grain to Iran.
"But of course the cost for such deals is going up," a
Another said: "Iran is also working a lot through China
which is helping them a lot they are also picking up stocks from
the inland from Kazakhstan. They have smuggling areas on the
Kurdish side of Iraq and a lot of smuggling is going to Iran
Dealers said Iran may turn its attention to buying vegetable
oils and animal feed grains in coming weeks.
"Most of the recent buying has been wheat but they have a
large requirement for feeds and oilmeals and indications are
their vegetable oil imports have not been enough," one broker
(Editing by Veronica Brown and Jason Neely)