Tricky wheat trade

Iran bought almost half a million tons of wheat this week using rubles as payment, traders told Reuters news agency on Thursday. Private buyers were also reported to be in talks to import further tonnage from Russia in a bid to work around western sanctions.

Traders said Tehran had become more active on international grain markets, having bought a total of 1.1 million tons over the past two weeks. It invariably deployed non-dollar and non-euro currencies with dealers, who also confirmed talks on barter deals involving oil and gold.

Iran's total grain purchases from February through April of this year were put at 420,000 tons of wheat of German origin, at least 300,000 tons from Canada, 240,000 tons of Brazilian origin and another 200,000 tons of wheat coming from Austria.

Sanctions start to bite

New financial sanctions were imposed on Iran at the beginning of this year in an attempt to punish that country over its nuclear program. The measures in place have had heaviy impact on Iran's ability to buy imports and receive payments for vital food items.

Traders said future deals would most likely continue to be done primarily in rubles, with Iran eager to dodge European Union and US currency restrictions.

Despite the resourcefulness of Iranian traders, western sanctions appear to have seriously disrupted the country's grain imports, particularly its yellow corn supplies. Domestic Iranian corn prices have shot up by up to 25 percent since the sanctions went into force.

Despite conflicting reports on whether or not Tehran might cut crude oil exports to Europe in revenge soon, oil markets on Thursday fell alongside equities.

hg/gb (Reuters, AP)