Iran evades US sanctions by paying with gold
Iran bought 200,000 tons of Australian, and possibly US, wheat last week with gold. Commodities traders say Iran is also pitching oil barter deals for grains.
Paris and Hamburg, Germany
Iran is seeking to close grain purchases using gold and oil as payment, and has paid in yen for a large volume of wheat in its first deal since Western sanctions against Tehran started choking imports of food staples, European wheat exporters said.Skip to next paragraph
Subscribe Today to the Monitor
Iran bought at least 200,000 tonnes of soft wheat on the world market last week for prompt delivery from private sellers - mostly of Australian origin - but some traders said the United States could possibly account for part of the volume.
New financial sanctions imposed since the beginning of this year to punish Tehran over its nuclear program have ended up playing havoc with Iran's ability to buy imports and receive payment for key food items.
The sanctions have drastically cut its ability to obtain euro and dollar denominated financing, forcing Tehran to find alternative ways to pay for its imports.
A fall in maize supplies from major exporter Ukraine due to sanction-related payment problems prompted Iranian animal feed makers to turn to wheat, reducing volume for food and compelling the Islamic Republic to turn to the world market.
"The Iranians have just purchased about 200,000 tonnes of wheat from multi-national trading houses," one European trader said. "There is market talk of up to 400,000 tonnes."
In an interview with Reuters on Wednesday, U.S. agri-giant Cargill's vice chairman said shipments were still possible with Iran, notably through payments in currencies other than the dollar.
Iranian Trade Secretary Rahul Khullar told reporters on Thursday that one private Iranian buyer was interested in importing "a very large quantity" of wheat from India.
Iran, which may not be self-sufficient in wheat this season due to an expected lower harvest, usually favous Australian, Canadian and even in some years U.S. wheat when it imports due to their high protein levels, as opposed to Argentine, Black Sea or European wheat origins.