Published On: Thu, May 7th, 2020

Iran scrambles to buy grain amid growing fears of coronavirus food shortages | World | News

President Hassan Rouhani insisted the country’s bumper grain crops will guarantee ample staple foods to the end of the Iranian year in March 2021.

But the recent buying spree highlights concern in Tehran of a possible future supply crunch should the pandemic further exacerbate an already challenging environment for Iran to import from international sellers.

The urgency has prompted Iran to alter its approach to buying commodities, seeking out direct contracts with smaller-sized trading houses rather than announcing international purchasing tenders.

An agriculture ministry source said Iran needed to import 4 million tonnes of wheat, 1.5 million tonnes of barley, 700,000 tonnes of raw sugar and 4 to 5 million tonnes of corn, in the Iranian year ended March 2021.

Competition for international commodities is heating up as governments move to buy more to shore up their reserves, spurred into action by lockdowns which have slowed supply chains and prompted export curbs.

Food, medicine and other humanitarian supplies including animal feed are exempt from US sanctions, re-imposed in 2018 after the United States pulled out of Iran’s nuclear deal with six world powers.

But authorities say the step has nevertheless deterred some foreign banks from doing any Iranian business, including food shipments.

The effect of sanctions-related financial hurdles on Iran’s food buying capability was clearly demonstrated in late 2019, when at least 20 vessels carrying more than a million tonnes of grains piled outside Iranian ports as payments lingered.

Those shipments were proof of Tehran’s decreased ability to procure life-line commodities, a political risk to Rouhani and clerical rulers, who face intense pressure from Donald Trump to curb Iran’s nuclear activities and missile programme.

READ MORE:World War 3 panic: Iran threatens ‘CRUSHING response’ to US

Iran has already faced waves of politically-charged protests against economic mismanagement, rampant corruption and scarce jobs.

The Islamic Republic is under rising economic pressure as it remains shut out of international capital markets and faces a further finance troubles with the collapse in oil prices, on top of the US embargo targeting its oil industry.

A Middle East trading source, who does business with Iran, said Tehran was now focused on doing the bulk of its wheat and corn purchases through private contracts rather than formal government purchasing tenders and seeking out smaller trading outfits to sign deals.

Iran has been gradually lifting restrictions on public life imposed to limit contagion from the global COVID-19 pandemic.

A ban on inter-city trips and business at shopping malls has been lifted and President Hassan Rouhani said on Sunday mosques and schools would reopen soon in areas that have been consistently free of the coronavirus.

ISNA news agency said hair salons for men and women have been given permission to reopen.

Health officials have repeatedly warned that Iran could face a new wave of infections if social distancing is not maintained and masks and gloves not used as more and more restrictions are lifted.

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