Drought stricken, Iran buys US wheat for first time in 27 years

Agence France-Presse: Wracked by drought, Iran has turned to the United States for wheat for the first time in 27 years, marking a setback for Tehran's search for agricultural self-sufficiency. According to a recent US Department of Agriculture report, Iran has bought about 1.18 million tonnes of US hard wheat since the beginning of the 2008-2009 crop season in June.

The number, which has been growing steadily all summer, already represents nearly 5.0 percent of US annual exports forecast by the USDA. The last time Iran imported US wheat was in 1981-1982.

"Number one -- they need to import a large amount of wheat," said Bill Nelson, a grains market analyst at Wachovia Securities. "If they need wheat right now, the US is the place to go." According to Nelson, Iran's wheat production has been hammered by several months of drought, with crop forecasts of roughly 10 million tonnes this year, about five million tonnes short of the country's needs.

…Although Iran is subject to a growing number of sanctions imposed by Western countries that want Tehran to suspend its nuclear enrichment program, these US grain exports, like those of medications, are "legal and encouraged," a State Department spokesman, Robert McInturff, told AFP. They require authorization from the Treasury because of a law Congress approved in 2000, the Trade Sanctions Reform and Export Enhancement Act (TSRA), he noted.

…Analysts noted that Tehran could have used an intermediary, like Syria, to import US wheat to avoid having the sale recorded in official data. "Maybe the relationship between Iran and the US is not as terrible as it has been," Nelson said. In fact, a senior US diplomat took the unusual step of sitting at a negotiating table with Iranians in July. The United States is also considering sending diplomatic personnel to Tehran….

Tehran from space, NASA, Wikimedia Commons