Iran has turned to India for wheat supplies as other sellers divert grain cargoes away from the Middle East country because of sanctions-related payments problems that have caused palm oil imports to grind to a halt. Indian tea was also added on Thursday to a growing list of Iran''s food imports that are being disrupted by US and European Union sanctions aimed at forcing Tehran to scrap a suspected nuclear weapons programme.
India''s Trade Secretary Rahul Khullar said a private Iranian buyer is interested in importing "a very large quantity" of wheat, which the world''s second-biggest producer of the crop has in surplus. Khullar, the most senior official in the ministry, suggested India was considering the sale. India wants to step up exports to Iran in a range of goods to settle part of its oil due to Tehran.
"There are UN sanctions which India honours, those don''t cover the export of vast range of products which India can export to Iran," Khullar told reporters. "If the EU and the US both want to stop exports to that country, please tell me why I should follow suit? Why shouldn''t I take up that business opportunity?"
"If Europe and the US believe they wish to sanction exports of a large number of items to that country that is their choice. But for us we shall continue business," the trade secretary said. In recent days more evidence has emerged showing that Iran is having problems buying rice, cooking oil and other staples for its 74 million population.
US financial sanctions imposed since the beginning of this year and targeted at Iran''s central bank are playing havoc with the Opec producer''s ability to buy imports and receive payment for its oil exports, commodities traders said. Trading sources said on Thursday that Singaporean firms have stopped supplying Iran with Indonesian palm oil on concerns over the country''s ability to make payments, a day after traders said Malaysian exporters had taken a similar action.
Indonesia and Malaysia account for 90 percent of the global production of palm oil. Most deals for Indonesian palm oil are conducted in Singapore. "I can confirm that Singaporean firms have stopped. We don''t want to go anywhere near Iran at this moment, it is too risky," said a trader with a listed Singaporean firm that ships Indonesian palm oil cargoes to the Middle East and Iran.
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