Trade with Russia stood at 930,400 tons worth $382.8 million during the two months to May 21, according to the spokesman of the Islamic Republic of Iran Customs Administration.
Imports hit 758,600 tons worth $321.3 million, registering a 109% and 29% year-on-year growth in weight and value, respectively, IRNA reported.
The imports, which mainly included wheat and corn, stood at 362,600 tons worth $249 million during the corresponding period of the year before, Rouhollah Latifi added.
Feb. 20-April 20, 2022, exports hit 171,800 tons worth $61.5 million, registering a 22% and 36% year-on-year decline in weight and value respectively.
The exports stood at 220,900 tons worth $96.1 million during Feb. 19-April 20, 2021.
During the two-month period of 2022 under review, trade with Ukraine stood at 5,900 tons worth $3.4 million, he added.
Imports hit 563 tons worth $565,700, registering a 97% and 98% decline in weight and value respectively compared with 20,700 tons worth $27 million during Feb. 20-April 20, 2021.
Exports stood at 5,300 tons worth $2.9 million, registering a 63% and 76% decline in weight and value compared with 15,000 tons worth $12.3 million in the corresponding period of last year.
Until the start of the war between Russia and Ukraine, Iran traded $2 billion in the first 10 months of last fiscal year (March 21, 2021-January 20) with the two countries, of which about $1.8 billion were with Russia.
Wheat, corn, barley and oilseeds were among Iran's main imports from Russia until the war broke out.
Imports from Ukraine mainly consisted of wheat, corn and sunflower oil.
Exports to Russia stood at 198,663 tons worth $68.58 million in the first two months, registering a 12% and 29% decline in terms of weight and value year-on-year, respectively, Latifi said.
Imports from Russia hit 443,681 tons worth $319.14 million during the two-month period, registering a 45% and 73% year-on-year growth in weight and weight respectively.
Largest Grain Importer From Russia
Iran became Russia's largest grain importer, importing 3.7 million tons of grain in the agricultural year from July 1, 2021, to June 30, 2022, according to the 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 barley and 215,300 tons of corn. Thus, Iran reached first place not only among the 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.
Russia’s Ministry of Agriculture reported earlier 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 Ministry of Agriculture, 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.
Major Wheat Exporter to Iran
About 20% of Iran’s wheat imports were from Ukraine in the last Iranian year (March 2021-22), according to the head of Iran’s National Wheat Farmers Foundation.
“The war between Ukraine and Russia, both among the main exporters of wheat in the world, has negatively impacted the international grain market. Moreover, global water shortage and drought have decreased wheat production across the world and right now the market is tumultuous,” Ataollah Hashemi was also quoted as saying by IRNA.
Ukraine, according to the official, accounts for 10 million tons or 10% of the global wheat exports and is the fifth biggest exporter of this staple grain yet, based on the latest figures released by the Food and Agriculture Organization of the United Nations, the country has lost more than half of its annual production this year.
“Because of US economic sanctions imposed on Iran, which already makes trade a challenge, our domestic market supply is more at risk in this situation,” he added.
“Russia and Ukraine have been traditional suppliers of the staple grain as well as corn and oilseeds to Iran for years. Other countries, too, buy part of their demand for wheat from the two countries now engaged war. We import wheat from Germany, Australia, Canada and Argentina as well,” the head of the Federation for Iranian Food Industries Associations, Mohammad Reza Mortazavi, was quoted as saying by ILNA.
Noting that every year up until May, prices of agricultural products rise, the official said this year the conflict between Ukraine and Russia has also impacted global prices, adding that over the past six months wheat has seen the highest price rise in the past five years.
“The war has also made other nations think about purchasing agricultural products and foodstuff, and store the commodities to ensure supply to their local markets. Whenever Egypt and China in particular start to fill up their reserves, the international market goes through another price hike. We hope that with the beginning of the harvest season, prices will come down,” he said.
“We, like other states, need to import goods to fill up our strategic reserves, but I believe the best time to make purchases for this purpose are the four months after May, that is June, July, August and September when harvest takes place and prices are moderate. Right now, global prices are at their highest level and if, hopefully, the war in Ukraine comes to an end and no other wars are waged, we can be optimistic that prices will decline in the international market.”
Food Security Concerns
The ongoing conflict between Ukraine and Russia has caused concern among Iranian importers of oilseeds, vegetable oils, grains and livestock feed.
Reza Nourani, the head of the National Association for Agricultural Products, said at the war’s onset that Ukraine and Russia supply 25% to 30% of Iran’s demand for different kinds of grains, especially wheat and barley. He also expressed concern 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.”
Ukraine was the largest exporter of sunflower seed and the related safflower oil in 2019, accounting for 45.8% of global exports. Russia was second with 23.4% of the market. Iran was the fourth-largest importer of sunflower seed or 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.
According to Al-Monitor, Iran gets a large amount of its sunflower oil from Ukraine and the export could be disrupted by the ongoing conflict. Iran received a majority 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’ sunflower oil imports also largely come from Ukraine. Iraq imported a whopping 87.8% of its sunflower oil from Ukraine in 2020. Egypt got 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. Turkey also imports some sunflower oil, 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.
