Private Sector Interested in Wheat Deals

12 April 2010
Deputy commerce minister said Saturday in fiscal 2010-11 for the first time the private sector will buy 70 percent of excess wheat produced in the country.

"The Commerce Ministry has signed deals with 350 private companies wanting to buy the wheat. In the past the private sector bought a lesser volume of the wheat. However, their share has increased this year in line with implementation of Article 44 of the Constitution," Hamid Alikhani.

For almost three decades the private sector was little interested in buying locally-produced wheat, he said. "The private companies that now have contracts with the ministry are its trade partners in the Society of Flour Factories, which have sufficient competence for the task," IRIB quoted him as saying.

He recalled that the ministry's infrastructure, the banking system and warehouses will be made available to private companies.

"This year the guaranteed (by the state) price of each kg of wheat is 3,300 rials and will not change.

But it needs recalling that the agreement reached between the private sector and wheat farmers (regarding prices) is also important," he said without elaboration.

Harvesting in a few provinces has started since April 4 and so far about 2,500 tons of the crop has been bought from farmers.

"Based on estimates of the Agricultural Jihad Ministry this year it is forecast that 9-12 million tons of wheat will be harvested of which 9.5 million tons will be purchased in a guaranteed manner. The peak of purchases from farmers will start by the end of April. At present, over five million tons of wheat is stored in silos and we should be able to export wheat this year," he said.

Restricting Imports
Alikhani said wheat will not be imported in fiscal 2010-2011, Mehr News Agency reported.

The Commerce Ministry has permission to import six to seven million tons of wheat in 2008-09 and 2009-2010 and a major volume of it has already been imported.

He said negotiations are underway with neighboring countries to export wheat.

If the talks produce results, after three years Iran will once again start exporting the strategic food item. Iran for the first exported 40,000 tons of wheat to Oman in 2007-08.

Alikhani emphasized that the government has authorized export of two million tons of wheat this year.

"The global price of each kg of wheat is 2,000 to 2,400 rials. The government has made arrangements so that the private sector can export wheat at competitive prices".

Silos have been built nationwide with a capacity of six million tons.

"This year, it is expected that 1.5 million tons will be added to this capacity. Every year about 10 million tons of wheat are put in the silos and our aim is to increase this capacity," he noted.

Regarding bread prices in the new fiscal year (started March 21), he said that "will depend on the implementation of the subsidy reform plan" over which there have been differences between the government and Parliament and its fate is still unclear.

© Iran Daily 2010

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