The ongoing conflict between Ukraine and Russia has caused concerns among Iranian importers of oilseeds, vegetable oils, grains and livestock feed.
According to Reza Nourani, the head of the National Association for Agricultural Products, Ukraine and Russia supply between 25% and 30% of Iran’s demand for different kinds of grains, especially wheat and barley.
“Trade with Ukraine has been affected since last week and it is predicted to halt within the next few days. It seems that we can only wait and hope for the war to end soon,” he was quoted as saying by ILNA.
He also expressed concerns about Iran’s agricultural outsourcing in Ukraine.
"Iranian farmers have invested in Ukraine, growing grains, mostly wheat and barley, there. The future of these farmers is now in danger,” he said.
Middle East sunflower oil imports could soon be affected by the Russia-Ukraine conflict, Al-Monitor reported recently.
Ukraine was the largest exporter of sunflower seed and safflower oil in 2019, accounting for 45.8% of global exports. Russia ranked second with 23.4% share of the market.
Iran was the fourth-largest importer of sunflower seed and safflower oil that year, accounting for 6.25% of global imports. Iran was behind India, China and the Netherlands, according to the MIT-based Observatory of Economic Complexity.
Iran gets a large amount of its sunflower oil from Ukraine, so the export could be disrupted by the ongoing conflict. Iran received most of its sunflower oil from Turkey in 2020, but 37.1% came from Ukraine, according to the commodity data analysis firm Tridge.
Several other Middle Eastern states also largely import sunflower oil from Ukraine. Iraq imported a whopping 87.8% of its sunflower oil from Ukraine in 2020. Egypt purchased 54.4% of its sunflower oil from Ukraine that year and another 18.83% from Russia.
Turkey could benefit from a stop in Ukrainian and Russian sunflower oil exports. Turkey’s sunflower oil exports increased by 175.55% from 2015 to 2020, according to Tridge.
The war is already having effects on sunflower oil exports from Ukraine. Some 350,000 tons of India-bound oil are in jeopardy at present, Bloomberg reported.
The Russia-Ukraine conflict is already having significant economic impacts on the Middle East. Egypt is scrambling to find alternative wheat sources due to the war. Oil prices also hit an eight-year high, following the start of the conflict.
Iran became Russia's largest grain importer by purchasing 3.7 million tons in the agricultural year from July 1, 2021, to June 30, 2022, according to analytical company Prozerno.
"For the first three months of the new season 2021-22, exports to Iran from Russia amounted to 3.697 million tons of grain, including 3.091 million tons of wheat, 392,600 tons of barleyand 215,300 tons of corn. Thus, Iran ranked first not only among importers of Russian wheat and corn, but also in the overall standings for all grain types," the statement said.
Experts estimate that Turkey purchased 3.523 million tons of Russian grain, including 2.87 million tons of wheat, 569,200 tons of barley and 73,100 tons of corn. Egypt came in third place with 1.69 million tons of wheat, TASS reported.
The Russian Agriculture Ministry had earlier reported that grain exports in the 2021-22 agricultural year decreased by 21.3% and amounted to 13 million tons as of Oct. 14. At the same time, the volume of wheat exports for the season decreased by 18% and amounted to 11.1 million tons, barley by 34.9% to 1.5 million tons and corn by 56.5% to 0.2 million tons. According to the forecast of the Agriculture Ministry, for the current agricultural year, grain exports may amount to 45-48 million tons. Agricultural exports from Russia amounted to 48 million tons in 2020-21, including 38.4 million tons of wheat.
According to Amir Houshang Birashk, secretary of the Vegetable Oil Producers Guild Union, Iran’s oilseed production currently stands at 430,000 tons per year while annual imports amount to 2.29 million tons.
He noted that 71% of Iran’s demand for vegetable oil are imported in the form of unprocessed oil, 20% in the form of oilseeds and the remaining 9% are produced locally.
“We import soybeans, sunflower seeds, palm and colza. Palm oil accounts for 30% of the country’s vegetable oil consumption,” he said.
