Iran is giving Russia another market to offload its massive wheat harvest.
The Persian Gulf nation has agreed to buy the grain from Russia and Kazakhstan, and total shipments may reach as much as 1 million metric tons a year over the next five years, according to the Tehran Chamber of Commerce. The wheat can only be used to make flour for exporting, and a ban imposed in 2016 on wheat imports for domestic consumption remains in place.
“There is unused capacity at Iran’s flour mills,” Kaveh Zargaran, chairman of the agriculture committee at the Iranian trade organization, said in an interview in Moscow. Shipments may start at the end of next month if Iran’s private millers can obtain loans to buy the grain, he said.
Russia has been shipping out wheat at a record pace this season as the world’s top exporter offloads its biggest ever harvest. Attractive prices for the grain have helped the country grab market share from places like the U.S. and Europe, while Moscow has also been eyeing up new destinations such as Iran and Saudi Arabia. Russian Energy Minister Alexander Novak, who oversees trade with Iran, on Tuesday said he expects sales to Iran to reach 1.5 million tons a year.