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Kazakhstan, Russia, Iran ink co-op memo on wheat trade

13 February 2019 18:14 (UTC+04:00)
Kazakhstan, Russia, Iran ink co-op memo on wheat trade

By Abdul Kerimkhanov

The Islamic Republic of Iran does not need to import wheat since the country has achieved self-sufficiency in the production of this grain crop. At the same time, Tehran can play the role of a bridge for exporting wheat produced by Russia and Kazakhstan to other countries.

Kazakh, Russian and Iranian Ministries of Agriculture signed a Memorandum of Understanding on wheat trade cooperation on February 12.

Kazakh Deputy Minister of Agriculture Gulmira Isayeva, Deputy Minister of Agricultural Jihad of Iran Ali Akbar Mehrfard and Russian Deputy Minister of Agriculture Sergey Levin signed a memorandum. A member of the Board (Minister) for Trade of the Eurasian Economic Commission Veronika Nikishina was also present at teh signing ceremony.

Gulmira Isayeva noted that the memorandum is an integral part of the Agreement on a free trade zone signed between the EAEU member states and Iran in 2018.

She recalled that in recent years, Iran has limited wheat import from other countries due to self-sufficiency, noting that Iran produces 12 million tons of wheat, which meets the country's domestic need.

‘‘But at the same time, the Iranian business, due to the underutilization of the milling capacity, which is about 50 percent, is interested in importing Kazakh and Russian wheat for further processing and export to other countries bordering with Iran. This market, in turn, accounts for more than 70 percent of global flour consumption,’’ said Isayeva.

In turn, Iranian representative Ali Akbar Mehrfard stated that the development of relations with the EAEU countries will lead to a more dynamic growth of trade between the states. He added that the sides will continue to strengthen logistics and industrial cooperation.

“The memorandum includes three very important aspects. Iran’s flour mills have great potential, and the regional market is about seven million tons. According to the memorandum, Russia and Kazakhstan can use Iran’s logistical capabilities and in transit to deliver their wheat to third countries. The second is the joint development of wheat SWAP contracts with Russia and Kazakhstan. The third is related to the conditions of temporary importation,” said Ali Akbar Mehrfard.

Then, Sergey Levin noted that now commercial agents will be able to start their work closely and expressed hope that the actual shipment of wheat to Iran will begin soon within the framework of mutually beneficial contracts concluded.

As Levin said, trade in the products of the agro-industrial complex continues to be the most important component of the general trade and economic relations connecting the countries.

He added that the Iranian market is key in the region of the Middle East and the Persian Gulf for Russian exporters of agricultural products.

According to the memorandum, the Iranian side in relation to Kazakh and Russian wheat, within the framework of its national legislation, will promote freedom of transit through its territory, will support the import of wheat in the framework of SWAP contracts, including on exemptions from bans and other restrictions on Kazakhstani and Russian wheat.

The memorandum also provides for exemption from any customs duties or other equivalent fees, in respect of wheat imported from Kazakhstan and Russia for the transit purpose or temporary import.


Abdul Kerimkhanov is AzerNews’ staff journalist, follow him on Twitter: @AbdulKerim94

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