MOSCOW: Plans for a deal under which Russia and Kazakhstan are to supply wheat to Iran have stalled as “no progress” has been made in its financing, the secretary general of the Iran Federation of Food Industry Associations said.
Talks on the deal began six months ago. It would see Russia and Kazakhstan supplying wheat to Iranian flour millers, who in turn would supply flour to Iraq — a market dominated by Turkey.
“The Iranian side had its condition – if you would like to realize such agreement, you need to finance it. There has been no progress in this process so far,” Kaveh Zargaran told Reuters on the sidelines of a grains conference in Moscow this week.
Under the deal, Russia would supply around 100,000 tons of wheat per month to Iranian private millers, who are not allowed to use domestic wheat for flour exports.
Iran was one of the largest markets for Russian wheat until it slashed purchases in 2016 amid Tehran’s self-sufficiency drive.
According to Zargaran, Brazil has recently suggested a credit line of $1.2 billion for trade development with Iran, and “Russia also can do the same for Iran as financing is very common in the world.”
Iran’s currency has lost about two-thirds of its value this year, hitting a record low earlier this week of 150,000 rial to the dollar. Its already weak economy, troubled by difficulties at local banks, has been hit by the reimposition of US sanctions.
“We have agreed with many countries to continue our banking relationship,” Zargaran said when asked if banking channels will remain open for Iran, including its humanitarian needs if any, after early November.
“We all have very good friends in the region, which are also under sanctions – Iran, Turkey and Russia,” he added.