Iran buys U.S. wheat again, trade set to grow

(Reuters) - Iran has purchased 60,000 metric tonnes of U.S. wheat, the U.S. government said on Thursday, raising the two-week tally to 180,000 tonnes, which industry sources said reopened grain trade ties between the two countries embroiled in a stand-off over Tehran's nuclear ambitions.

Iran's purchases of U.S. wheat this year are its first in three years, and the sources said the OPEC member was close to completing purchases of another 220,000 tonnes to be shipped as early as April, and in talks with exporters to buy another undisclosed amount.

The price tag for the 400,000 tonnes -- 180,000 confirmed and 220,000 yet to be formally declared -- could be around $160 million, export sources said.

Prices were believed to be above world market prices by around $25 to $30 per metric tonne to account for the greater risk shipping grain to the volatile region.

Trade sources said grain giants Cargill Inc. and Bunge Ltd were the likely suppliers to Iran, but the two companies declined to comment.

The two companies were also major sellers of wheat to Iran three years ago when Iran, normally self-sufficient in wheat, imported nearly 7 million tonnes on the world market, including 1.8 million tonnes from the United States.

Iran has purchased some 2 million tonnes of wheat from several origins since February as it stockpiles food in response to tough new sanctions aimed at containing its nuclear program.

"If they need something really quick and reliable, the U.S. is there to do it," said a U.S. wheat trader, asking not to be named.

"You can only get so many cargoes out of Brazil or Germany quickly. Russia obviously still has some logistical issues and if they want more, and they want it in April or May at the latest, they're going to have to come to the U.S.," he said.

LARGE APPETITE FOR WHEAT

Wheat traders said they were not surprised that Iran was seeking grain from its arch rival, but were impressed by the size of Tehran's appetite for imported grain and urgency of that need.

"They seem to be taking hundreds of thousands of tonnes a week. If that's the case and we repeat 2008, if they buy 7 million tonnes of wheat, this is going to be a huge deal for the market," said another wheat trader, citing the last time when a drought-reduced wheat crop prompted Iran to book U.S. wheat.

He cited a recent Iranian purchase from another origin that was booked then began loading within a few days.

Global wheat stocks are hovering near record levels, but supplies in major exporting countries in position to be shipped quickly were far less abundant, traders said.

Iranian imports could top 5 million tonnes this year, with the majority of that by the end of May, they said.

"They are scaling up imports because of fears of poor crops due to severely dry weather in the region. Expectations for seasonal output have been reduced, and inventory levels have come off," said Shelly Goldberg, director of global resources and commodities strategy at research company Roubini Global Economics in New York.

The United States has imposed sanctions hitting Iran's oil trade and central bank to pressure Tehran to shutter its nuclear program, which Iran says is for peaceful purposes. A U.S. advisory group said last month that the sanctions are squeezing Iran's oil exports even before they take effect in June.

The sanctions are making it increasingly difficult for the country to pay for staple foods, causing hardship for its 74 million people. The wheat sales are approved under a humanitarian authorization from the Treasury Department to ensure food and other needed items reach the Iranian people.

Iran also has approached Pakistan and India and has bought wheat from Russia, Germany, Canada, Brazil and Australia in recent months in an effort to build its food stores.

(Additional reporting By Emily Stephenson in Washington, KT Arasu in Chicago; Editing by Alden Bentley and David Gregorio)

Source: http://news.yahoo.com/iran-buys-u-wheat-again-trade-set-grow-195026688.html

gwar guitarist gwar guitarist tower heist humpback whale humpback whale barrel roll anagram