Iran bought around 2m. tonnes of wheat over past couple of months; Islamic Republic finding ways around credit freeze.
Vessels carrying at least 360,000 tonnes of grain are lined up to unload in Iran, Reuters shipping data showed on Thursday, a sign that Tehran is succeeding in stockpiling food to blunt the impact of tougher Western sanctions.
Iran has been shopping for wheat at a frantic pace, ordering a large part of its expected yearly requirement in a little over one month and paying a premium in non-dollar currencies to work around toughened Western sanctions and avoid social unrest.
Food shipments are not targeted under western sanctions aimed at Iran’s disputed nuclear program, but financial measures have frozen Iranian firms out of much of the global banking system.
Since the new year, some vessels had turned away from Iran without unloading after Iranian buyers were hit by a trade finance squeeze, but Thursday’s data appears to show that shipments are now arriving successfully.
In an effort to blunt the impact of the sanctions, Iran has even begun buying wheat from its enemy – the United Stat
The sanctions make it difficult to obtain letters of credit or conduct international transfers of funds through banks.
So instead, Iran has embarked on an ambitious buying spree, purchasing around 2 million tonnes of wheat since February at a premium to international market prices in currencies including Japanese yen and Russian roubles.
“There is no doubt in my mind it is geopolitical hedging. They are trying to get as much (wheat) as they can in the country to blunt the effect of any further escalation in international sanctions,” Rabobank commodities analyst Nick Higgins said.
“I think they hit the market hard and early and that from their perspective limited the chances that anyone could react to such large purchases,” he added.
AIS ship tracking data on Reuters showed 10 dry bulk vessels on Thursday were anchored outside Bandar Imam Khomeini, one of Iran’s largest grain terminals.
At least six of the vessels were larger ships known as panamaxes, which can carry around 60,000 tonnes of grains.
A further panamax vessel, which had been anchored at the port this week, was now heading to India and was likely to have discharged a cargo already, AIS data showed. A smaller bulker vessel was also heading away from Iran to Singapore after being anchored near the terminal this week.