Iran turns to Russia for wheat to boost flour sales

IRAN is holding talks to import 1 million tonnes of wheat from Russia to export as flour to neighbours Iraq and Afghanistan, said Iran Food Confederation secretary general Kaveh Zargaran.

Iranian flour millers are operating at 50 per cent of capacity and are seeking the wheat to boost sales. Officials from the Iran Food Confederation and Iran millers met with the Russian agriculture ministry in Moscow last week to discuss the trade, he added.

Iran is already one of the biggest suppliers of flour to Iraq. Iran's wheat consumption will be a record 18.35 million tonnes in the 2017-18 marketing year, exceeding domestic production of 15 million tonnes, according to the US Department of Agriculture.

Rain for the new harvest was "a little lower" than last year, so the crop may be smaller, said Mr Zargaran. Wheat imports for domestic use are currently banned to support local farmers.

Iraq imports about 3 million tonnes of flour a year, meeting almost half of its demand of 6.9 million tonnes a year, according to the Trade Ministry. Two flour mills were authorised to start production for the private sector for the first time since 1990, starting in March or April, according to Taha Yassin Abbas, general manager of the General Co for the Manufacture of Grain, which operates the government's 17 flour mills.

Turkey, the biggest shipper of flour to Iraq, is facing a smaller wheat crop, said Veysel Kaya, founder of brokerage and consulting company Sunseedman. BLOOMBERG