Major European Union banks have pulled back from financing grain shipments destined for Iran, hampering trade with the major importer of maize, banking and trade sources said on Thursday. "It is now a fact that no EU banks will do trade financing for Iran destination cargoes of grains, oilseeds or whatever," one European grain trader said.
"The bottom line is it is very difficult to work trading to Iranian destinations through banking systems. Some Iranian buyers are seeking to use other payment methods avoiding letters of credit, basically direct payment, but this is unworkable for large-size shipments."
One European banking source said the major banks had halted trade financing for agricultural products destined for Iran and that any new deals would have to be backed by smaller entities. Iran imports around 4.5 million tonnes of grain a year, including about 3.5 million tonnes of corn, the leading world grain for animal feed, according to International Grains Council figures. It ranks among the top 10 global importers of maize. Its key corn suppliers include Brazil, Argentina and Ukraine. "As far as I know there are six panamax and three handy-size bulk carriers waiting in the anchorages off Iranian ports and unable to unload because of payment problems," the trader said.
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