Iran’s wheat buying in recent weeks may have been prompted by concern import costs will rise after presidential elections this week, said Abdolreza Abbassian, an economist at the UN’s Food & Agriculture Organization.
“The worry is that after the election the result may not be market-friendly, and the currency could come under further pressure,” Abbassian said in an interview in London. “Anyone that takes Iran into more isolation would be difficult for the Iranian economy to handle.”
Iran bought 600,000 to 800,000 metric tons of wheat in the past two weeks for shipping in July or August, according to Francois Luguenot, the head of market analysis at French grain cooperative Union InVivo. The country has been buying “a lot” from Germany, Abbassian said.
The United Nations’ FAO is forecasting Iran’s wheat imports will fall to 1.5 million tons in 2013-14 from an estimated 4.7 million tons in the year through June, according to Abbassian. The estimate for 2012-13 may be raised “a bit” on account of recent large purchases, he said.
“It’s not been a particularly bad year in terms of production,” Abbassian said in an interview at an industry conference in London. “Production is anywhere between 13 million and 15 million tons. They’re harvesting now.”
Iran’s wheat harvest has been within that range for the past two seasons, according to the FAO economist. Iran has invested in grain infrastructure and has sufficient storage capacity, with wheat stocks that may be as high as 5 million tons, Abbassian said.
“When it comes to food and especially wheat for bread, nobody would risk it,” Abbassian said. “The government will make sure that people get their wheat and rice.”
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