June 8, 2012 / 3:16 PM / 7 years ago

Iran needs additional 2 mln T wheat -French lobby

* Iran says 3 mln tonnes wheat already in Iran -lobby

* Iran buying to compensate use of milling wheat in feed

* Iran also building stocks to avoid shortage

* Average Iranian wheat harvest expected

By Valerie Parent

PARIS, June 8 (Reuters) - Iran needs to buy some 2 million tonnes of milling wheat in the next few months after having already imported 3 million so far this year, a member of the French grain exporters’ lobby said, as the country dodges sanctions to shop for wheat at a frantic pace.

Iran has ordered a large part of its expected yearly wheat requirement in a little over one month and has paid a premium in non-dollar currencies to work around Western sanctions and avoid social unrest.

“According to the people we spoke to at the Iranian millers chamber, 3 million tonnes of wheat has arrived since the start of the year,” an official with France Export Cereales said.

Members of the industry group were in Iran last week to promote French wheat through a technical seminar with over 140 millers and bakers. It was the sixth seminar of the kind in Tehran.

“They (the Iranians) estimate their needs at a total 5 million tonnes,” with the additional imports over the next few months, the official added.

Official tenders and traders’ reports show that the Iranian government and private buyers have purchased over 2 million tonnes of bread wheat from Germany, Canada, Brazil, Australia, Russia, Kazakhstan and even the United States, but the exact volumes and delivery dates are not clear.

Iran also has approached Pakistan and India, but doubts have been expressed over whether the barter deals announced will be reached.

Iran’s import needs depend on the progression of its own harvest, which started early last month in the southern part of the country and should last until September.

Some European traders questioned the lobby’s figure of 3 million tonnes already imported, saying it could not be matched by exporting countries’ shipping data.

“Deliveries are not working that well,” one said. “I doubt there is already 3 million tonnes in the country.”

Traders said the Middle Eastern country’s total needs this season could reach as much as 8 million tonnes.

FEED WHEAT SHORTAGES

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.

The French lobby official said that state buyers he met explained that GTC (Government Trading Corporation) purchases made in recent months were linked to a shortage of feed grains - maize (corn), barley and feed wheat - as the sanctions made it difficult for private buyers to find supplies.

“A lot of (milling) wheat was used to feed animals at the cost of human food. As a result GTC was forced to react and buy milling wheat on the world market to ensure supplies,” he said.

“They did not give us the feeling of trying to build (extraordinary) stocks but rather to react to feed grain supply difficulties due to financial sanctions,” he said, adding that GTC officials did not seem worried about obtaining supplies.

Iranian officials told the French delegation that they were seeking to maintain a sufficient level of wheat stocks, because the country had imported little wheat last season and did not want to have to deal with a shortage.

The French lobby said Iranians had cited 3.5 million tonnes as an estimate for these stocks, while traders say this is a minimum now while trade financing is difficult.

“Iranians are constantly buyers,” one trader said. “The harvest will be normal. Why would they want to buy so much if it wasn’t for building stocks, and as soon as possible?”

Iran has a large livestock farming sector and needs to import grain to feed its population.

Its wheat harvest is expected to reach 14 million tonnes, which would be within the average of 13-15 million tonnes, the French official said.

Last month, the United Nations’ food agency FAO had said Iran’s 2012 wheat output would probably fall below 2011 levels to 13.5 million tonnes, hit by erratic rainfall in the main wheat producing areas.

“Human (wheat) consumption is estimated at 14-14.5 million tonnes, so Iran is bound to import,” the lobby member said, pegging annual food needs at 1 to 2 million tonnes, which would include imports of top quality milling wheat to improve flour. (Writing by Sybille de La Hamaide; Edited by Muriel Boselli and Jane Baird)

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