Iran buying appetite grows for European grains

Iranian buyers last week were seen to enquire about European barley and 12.5pc protein grade milling wheat for shipment periods ranging from July to March 2023.

Most buying interest lacked clear price levels but a bid for October-March-shipment European 12.5pc wheat was most recently seen at a €26/t ($27.20/t) premium to the Euronext December milling wheat contract on a fob basis. Offers for the same product for shipment from German ports during the same period were heard at a €31/t premium to the Euronext December futures contract earlier this week.

Interest for barley also lacked clear pricing indications but offers for Iran-bound shipments out of Romanian ports in the second half of July were seen at $420/t.

Meanwhile, a 63,000t cargo of French barley was scheduled to be shipped today from the French port of La Pallice for shipment to Iran by trading firm Viterra. This is the first official French barley export to Iran since July 2019, when 132,000t was shipped to the destination.

Iran’s 2022-23 grain harvest is expected to remain weak, with slight improvements on the year but broadly below levels seen in previous years. The nation’s wheat and barley output has been most recently pegged at 13.2mn t and 3mn t, respectively, for the upcoming season, up from 12mn t and 2.7mnt in 2021-22, under US Department of Agriculture (USDA) estimates.

And the country is forecast to import some 6mn t of wheat and 2.5mn t of barley in the next season, down by 1mn t and 100,000t on the year, respectively, according to the USDA. But the wheat import forecast this month was already revised up from the 5.5mn t that the USDA expected in May.

And Iran’s own industry groups expect higher wheat imports, amid a poor domestic harvest. Iranian Food Association last month predicted that the nation’s 2022-23 wheat imports would reach 7.5mn t.

Despite growing interest in European crops, Russia is expected to remain as the primary grain supplier to Iran. Iranian oil minister Javad Oji in late May said Russia was poised to supply 5mn t of wheat to Iran under a recently signed agreement between the two countries.

Iran was also recently reported to express interest in transit shipments of Russian goods to India and other South Asian destinations via the Caspian Sea and bypassing the Black Sea. Buyers yesterday were seen to enquire about Russian corn and barley for delivery to north Iran, without clear price or shipment indications.

Tags: grain harvest, French, Iran, Euronext, barley, price, wheat, forecast, futures, milling wheat, shipment, European