Wheat exports to Iran: India pushes to take Pakistan’s place

Published: May 24, 2012

India’s need to export grain has acquired greater urgency due to a storage crunch of more than 10m tons. PHOTO: FILE

India plans to aggressively push wheat exports to Iran by offering lower prices than rival Pakistan and will hold talks with Tehran early next month to resolve objections over traces of a fungal disease found in grain exports, reports the Wall Street Journal.

Iran, which has been scouting for food supplies due to Western sanctions, is eager to buy wheat from India but wants to ensure a supply of grain free of Karnal bunt, a fungal disease found in India’s breadbasket northern states.

“We are hoping to arrive at an agreement with Iran,” an Indian food ministry official said.

The government is also trying to identify regions in the country that can supply disease-free grain. It is aiming to export up to four million metric tons of grain to Iran this year.

India, the world’s second-largest wheat producer, is looking to export grain to Iran at $280 a ton, free on board, compared with $290-$300 per ton for Pakistani wheat.

India’s need to export grain has acquired greater urgency due to a storage crunch of more than 10 million tons. India is also anxious to export agricultural commodities following a bumper crop.

Shipments to Iran have to be cleared by a ministerial panel, but the government is hoping to expedite clearance and start exports as early as mid-June.

The panel may meet within a fortnight, another Food Ministry official said.

Iran may not have much choice. Wheat imports will likely become more difficult amid sanctions and tightening global wheat supplies. For example, Russian exports are expected to fall to 15.5 million tons from 17 million tons due to lower-than-estimated production, according to Rabobank.

Separately, Indian exporters have contracted to ship around 300,000 tons of soymeal to Iran during the marketing year that ends on September 30, said Davish Jain, former president of the Central  Organisation for Oil Industry and Trade.

He said around 50,000 tons of soymeal exports had been contracted with Iran last week, in the price range of $572 per ton free on board.

Earlier this month, an Iranian trade delegation visited India to buy, rice, sugar, soymeal and wheat. Iran has emerged as one of the top buyers of Indian soymeal and has been paying a premium for its purchases.

India and Iran recently arrived at a payment mechanism, as tightening Western sanctions made payment in dollars difficult. The mechanism allows Indian oil importers to make 45% of their payments in rupees, which Iran parks in a local bank and uses to settle payments to Indian exporters.

Published in The Express Tribune, May 24th, 2012.

Reader Comments (19)

  • NuPak
    May 24, 2012 - 7:30AM

    I'm surprised the above article never mentioned why the current U.N economic embargo on IRAN that was in the way of our Gas Pipe Line is not a hindrance here for India-U.S. realtionship?
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  • hisar
    May 24, 2012 - 8:24AM

    Indians have invested so nicely in their agriculture, greatly investing in technology, better crop management, new irrigation, new machines, that they are witnessing bumper productions of all major agriculture products across board for the past 4-5 years. They are now running short of storage which I think must be more than 300-400 million tonnes !!! I think they should now focus on distribution. It is obvious they will export cheaper and it is only natural for Iran to get food from them. There were news in Dawn and ET that many traditional pak export markets have shifted to China, India and S E Asian nations for agri imports. Are we playing a losing game as usual??? Who is the agri minister here?

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  • usman786
    May 24, 2012 - 8:33AM

    A ha! Someone told me Indian could be our best friends – aman ki asha…Let PAk govt/officials sleep …as if after getting bribe from …Recommend

  • syed baqar ahsan
    May 24, 2012 - 10:16AM

    @NuPak:
    Americans for the sake of friendship with India can go to any limit in violating law and ridicule UNO laws but if Pakistan do trade or import gas from Iran is violation.Sham to all western and muslim countries who stand with US on Iran/Pakistan matter.

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  • Yash
    May 24, 2012 - 10:30AM

    @usman786:

    aman ki asha doesnt say that india shudnt progress and stay behind pakistan

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  • Aditya Randhawa
    May 24, 2012 - 11:31AM

    @usman786:
    Indian do not have any asha of aman from Pakistan.Your statement shows your heart burn

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  • BD
    May 24, 2012 - 11:40AM

    @Usman786

    What do you expect –that Indians will not export at a competitive price even if they can??Peaceful relation does not mean the countries will not compete commercially in an export market

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  • Anyways
    May 24, 2012 - 12:02PM

    @usman786:
    What has aman ki asha to do with business. Do you want India to wait for you to wake up from your deep sleep?

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  • INDpolitics
    May 24, 2012 - 12:25PM

    @usman786: what illogical argument! Just because china and pakistan are friend does that mean china should stop making textile good and compete with Pakistan.. It’s a friendly competition and it pushes pakistan to give more attention to its agriculture industry.

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  • Parvez
    May 24, 2012 - 12:32PM

    Nothing new in this, we always are given the first chance but we mess it up by sending poor quality goods. So if someone else provides what it required at a better price, we have only ourselves to blame.

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  • Infinite
    May 24, 2012 - 12:58PM

    Pakistanis always taunt India with “aman ki asha” campaign, as if its only an Indian initiative….dude its a “joint” initiative and honestly, many on Indian side will support you to take down this pseudo love dovey campaign…and secondly even if aman ki asha continues it doesn’t mean India will ignore its economic interests…

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  • faraz
    May 24, 2012 - 1:13PM

    @Aditya Randhawa: As if Indians don’t have a heart burn! If indians are somehow showing ‘aman ki asha’, it’s all related to economics. Otherwise, we all know the truth!

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  • Tony Singh
    May 24, 2012 - 3:50PM

    @faraz:
    And the truth is?? What do you expect Indians to do? Not sell products. Giving chance to peace means going about your business in a peaceful manner. Or am I getting it wrong?

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  • Ali Wali
    May 24, 2012 - 4:20PM

    Very bad news for Pakistani farmers, shame on our export ministry. Last year most produce of northern Punjab headed to Iran, Iraq and Azerbaijan by road, though merchants lost money when Iran closed it’s border. Mind you this has always been the case for centuries before partition camel caravan route was Peshawar to Mashhad then Basra recently it is truck route, Taftan – Zahidan – Baku or Basra. The old route was also a pilgrimage route to Mashad, Najaf, Karbala, Madina and Makka. PS, I knew a lady who travelled with her dad for holy pilgrimage with camel carvans loaded with our area’s grains, I wish the old capitalists routes are revived and new one sustained.

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  • Rajendra Kalkhande
    May 24, 2012 - 6:28PM

    How can poor Pakistani farmers compete when government controls even the sack distribution. I was shocked when I read that news in this very paper about a week back. Shame on a country which can not make available even sacks to her farmers. I am no admirer of even Indian government. However, Pakistan is way down in looking after her farmers.

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  • realist
    May 24, 2012 - 7:11PM

    @usman786:
    “A ha! Someone told me Indian could be our best friends “

    What does your higher than himalayas, deeper than ocean do? The balance of PAK-CHINA trade is in whose favor?

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  • Ali Tanoli,
    May 24, 2012 - 7:22PM

    Bread price is so high in pakistan and we trying to sell to persian what a shame.Recommend

  • Shyam
    May 24, 2012 - 8:01PM

    @usman786, faraz

    If you cannot compete then you have no business to be in business

    Recommend

  • You Said It
    May 26, 2012 - 12:35AM

    @NuPak:
    That’s because the sanctions apply to Iran’s energy exports. They don’t apply to trade in food or pharmaceuticals.

    Recommend

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