The expert spoke about the impact of sanctions against Iran on grain exports

© RIA Novosti / Alexander Krauledat in fotomontage crop of oats. Archival photoThe expert spoke about the impact of sanctions against Iran on grain exports© RIA Novosti / Alexander Krajevima the image Bank

The introduction of U.S. sanctions against Iran may adversely affect the export of Russian grain: if Tehran would be isolated internationally, suppliers will have to curtail their business with Iranian companies, according to the CEO of the logistics company «glogos Proekt» Konstantin Grinevich.

The US President Donald trump on may 8 announced the release of the historic multilateral agreement with Iran on its nuclear program. The deal, also known as the «Joint comprehensive plan of action» (SVPD), was achieved by Iran and the «six» of international mediators — China, France, Germany, Russia, Britain and the United States together with the EU High representative for foreign Affairs and security policy — in 2015, after years of difficult negotiations.

In exchange for the lifting of sanctions, Iran agreed to significant concessions, agreeing to put full control of its nuclear programme, confirming that under no circumstances will not seek to obtain, develop or acquire any nuclear weapons. With the release of the agreement the United States restore all sanctions against Iran including secondary (in relation to other countries doing business with Iran), which was suspended in the framework AGREEMENT.

«If Iran will once again be in a situation of international economic isolation, the export chain from Russia to Iran can be difficult. Sanctions, first and foremost, will affect the financial sector of the Iranian economy. It promises the instability of the banks, freezing of accounts, and, consequently, a significant interference in the conduct of monetary operations», — told RIA Novosti Grinevich.

«Therefore, the traders will gradually phase out its commercial activity in the country. And given the favorable Outlook for the grain harvest in the current agricultural year, the loss of this market could have on Russian exports negative consequences,» he added.

Grain buy now

Russian exporters of grain, says «glogos Proekt», could occupy a niche in the Iranian market. The company indicates that the current situation around the sanctions against Iran are causing concern in the domestic grain market of the country.

Thus, according to the logistic company, Iranian traders are already trying to buy significant amounts of grain in order to avoid difficulties due to possible financial and political international isolation.

«In light of these developments, the Russian businessmen, provides export major volumes, can opt out of doing business with Iranian partners. Those exporters that remain will be forced to preserve trade relations to seek an alternative — other detours the sale of grain to Iran», — indicates «glogos Proekt».

From the data of the Federal customs service (FCS), it follows that Russia’s exports to Iran at the end of 2017 amounted to $ 1.3 billion, import — $ 392 million. The main articles of Russian exports to the Islamic Republic — cereals (about 27% in supply volume), ferrous metals (21%), fats, oils and waxes (11%), wood and articles of wood (9%).

Russia is supplying Iran with nuclear reactors, boilers, machinery and mechanical appliances (7% of exports). In turn, from Iran to Russia are mostly food products: edible fruits and nuts, vegetables and edible root crops (30% in import). From the country also imports copper and copper products (11%), plastics (5%), pharmaceutical products (about 4%).