HAMBURG: Iranian state-owned animal feed importer SLAL bought about 200,000 tonnes of corn, about 130,000 tonnes of feed barley and about 130,000 tonnes of soymeal earlier this week, European traders said on Friday.
SLAL has relaxed previous strict requirements for performance bonds and other conditions which made the large purchases possible, traders said.
“It looks like SLAL is returning to a more normal purchasing arrangement after its requirements for performance bonds hindered purchasing in recent months,” one trader said. “They seem to have completely changed their style of procurement this week, even permitting email offers which they did not in the past.”
Participation in recent tenders by SLAL has been weak with traders saying some banks are still unwilling to provide performance bonds for Iranian business despite the increased normality in trade after Tehran’s nuclear sanctions deal with western powers.
A performance bond is a guarantee of satisfactory completion of a project by a seller. If the deal is not fulfilled the sum in the bond must be paid.
A series of tenders in past months ended without purchases, or with grains bought from small trading companies not well known in international markets.
The 200,000 tonnes of corn bought this week was thought likely to be sourced from Brazil and was purchased at around 190 euros to 200 euros ($229.48 to $241.56) a tonne c&f.
Iran traditionally declines to purchase grains in US dollars.
The corn was for August/September shipment.
The barley was bought in two consignments of about 65,000 tonnes and was thought likely to be sourced from the Black Sea region.
It was bought at around 200 euros a tonne c&f for shipment around June/July.
The soymeal was also bought in two consignments of about 65,000 tonnes. It was thought likely to be sourced from Argentina or Brazil depending on availability with Argentina’s soybean crop expected to be much smaller this year after poor weather.
The soymeal was purchased at around 400 euros ($483.12) a tonne also for shipment around June/July.
“I expect to see more purchasing by SLAL in the near future as they have a requirement following the low level of buying in recent months,” a trader said. “Their new relaxed purchasing arrangements, especially the relaxation of the need for performance bonds, should mean mainstream international trading houses will again give price offers.”
“Because of the general increase in the political tension with the United States there could be more of a tendency to get planned imports purchased.”
A May 12 deadline is looming for President Donald Trump to decide on whether to re-impose US economic sanctions on Tehran.
Source: Brecorder
