Date: 09 Mar 2000
Time: 07:44:27
Remote Name: 156.29.145.175
By Irene Marushko
03/08/2000 Reuters English News Service (C) Reuters Limited 2000.
WINNIPEG, March 8 (Reuters) - Iran became the largest buyer of Canadian wheat in the last six months because of politics, a poor Iranian crop and a surplus of average quality Canadian grain, traders and market analysts said on Wednesday.
Recent Canadian Grain Commission figures show that Iran bought 1.7 million tonnes of Canadian-grown wheat from August to January this year. The second-biggest buyer was Japan at 711,700 tonnes.
"Poor crops in their own region have made them buy grain from a number of different countries," said an agricultural commodities trader.
Canada, unlike the United States, has not imposed trade sanctions on Iran and has been a steady seller of grain to Iran , a country of 66 million people.
The trader said Iran 's election of a reformist government last month signalled an internal spirit of change that was affecting grain buying.
"They've been a closed economy for a long time. There's a lot of pent-up demand," the trader said. "They've got a very young population. It's an amazing country in terms of what their demographics are," he said.
Iran 's Deputy Foreign Minister Morteza Sarmadi said earlier Tehran would start to buy U.S. wheat if Washington, as it is reported to be considering doing, eased sanctions on exports of rugs, pistachios and caviar from Iran .
Jim Pietryk, spokesman for the Canadian Wheat Board, said Iran 's demand for wheat increased after its 1999 harvest was a poor 8 million tonnes compared to 11 million tonnes the previous year.
"They need it and we have it," Pietryk said.
"Their production is variable. Like in North African regions, it's weather-dependent," he said.
Iran has purchased a yearly average of 1.4 million tonnes of Canadian wheat over the last 10 years, including 585,000 tonnes in 1998/99, 2.1 million tonnes in 1997/98 and 2.6 million tonnes in 1996/97.
The wheat board is the state agency solely authorised to export wheat and barley grown on Canada's Prairie provinces.
Canada's crop year begins on August 1 each year.
A Winnipeg-based grain market analyst said Iran was generally a buyer of low quality milling grades of wheat.
"This year's crop was of average quality, so there was a product fit. The wheat board was an aggressive seller when it found it would be a lower quality crop," the analyst said.
The wheat board has forecast Canada's wheat exports at 18.3 million tonnes in 2000/01 compared to the 1994-98 average of 18.5 million tonnes.
"There are big vessels of 60,000-75,000 tonnes loading for Iran . It's been pretty good shipping for us," the trader said.
Washington banned non-oil imports from Iran after the seizure of the U.S. embassy in Tehran in 1979. President Bill Clinton barred U.S. companies from purchasing Iranian oil and gas by executive order in 1995.