Russia aims to boost grains, vegoil exports to Iran

Zawya

3 days ago

MOSCOW: Russia aims to boost grains and vegetable oil exports to Iran through the Caspian Sea in the coming months, thanks to an anticipated larger harvest this year and an end to trading restrictions, market analysts and traders said on Tuesday.
Trade between Russia and Iran, both heavily sanctioned by the West, grew by 16% to $4.8 billion last year. It primarily goes through the inland Caspian Sea, whose coastline is shared by Russia, Iran, Kazakhstan, Azerbaijan, and Turkmenistan.
"There is potential to increase our supplies of corn, barley, and sunflower oil to the Iranian market," said Andrei Kucherov, head of agriculture at Reksoft, a consulting firm, partly owned by billionaire Vladimir Potanin's Interros holding.
Igor Pavensky, chief analyst at rail carrier Rusagrotrans, said Iran could triple Russian wheat imports to 3-4 million tons in the coming season and boost corn and barley imports to 3.6 million tons from 2.6 million.
Iran is the largest buyer of Russian corn and the second-largest buyer of Russian barley. After a pause due to a good harvest last year, Iran resumed wheat purchases from Russia in March, becoming the third-largest buyer in May.
"We are expecting a record sunflower seeds harvest this year. Corn, as well as barley and wheat, are in a good shape. So we have all the possibilities there (to increase supplies to Iran)," said Dmitry Rylko, head of IKAR consultancy.
Russian traders said Iran explored the pricing and availability of corn and barley from Russia over recent days.
Afghanistan is also in talks with Russia to import certain foodstuffs, a minister told Reuters recently.
HEALTHY DEMAND
Russia is expecting to harvest 135 million tons of grain this year, including 90 million tons of wheat, compared with 130 million tons of grain and 83 million tons of wheat in 2024. Iran's harvest is expected to be lower this year due to drought.
Iran's ability to trade internationally has been hit by President's Donald Trump's maximum pressure campaign, re-launched in February to drive down oil exports, as well as by surprise Israeli air attacks since last week.
Russian traders are preparing for the new grain marketing season, which begins on July 1, with an opportunity to export all grains without restrictions until February 2026, when exports will be limited by quotas.
Russia has set zero export quotas for barley and corn in the second half of the 2024/25 marketing season, effectively banning exports, which are due to resume next week. Traders said Iranian partners were actively discussing potential purchases.
"There was healthy demand from Iran," said one trader, who spoke on condition of anonymity. According to IKAR consultancy, Iran was the second-largest buyer of Russian grain after Egypt in the 2024/25 marketing season.
A second trader confirmed that talks were taking place and said he expected barley and corn trade flows through the Caspian Sea to resume after July 1. Corn accounted for 20% of Russia's total exports to Iran, while barley accounted for about 6%.