Iran makes first large raw sugar purchases in months

Iran, one of the world’s top sugar importers, has purchased at least 150,000 tonnes of Brazilian raw sugar after months away from the market and is set to step up imports in the coming months, trade sources said on Wednesday.

Tehran signed a nuclear deal with world powers last week, which is expected to help spur trade.

Iran imported small quantities in the first two quarters of this year, estimated at under 20,000 tonnes.

Government Trading Corporation of Iran (GTC) has bought three cargoes of raws from Brazil in the past two weeks, trade sources said.

“We should now see a lot more buying by GTC into the final quarter of this year,” one trade source said.

Port data showed at least one vessel was currently loading in the Brazilian port of Santos bound for Iran.

Another trade source said the cargoes were meant to be refined in Iran and re-exported to neighboring Iraq, while others said the purchases were destined for the domestic Iranian market.

“They have not imported much of late and while the indications are for a good local crop, their stocks could use a boost,” a third trade source said.

Iran's annual sugar consumption is estimated around 2.65 million tonnes, according to the International Sugar Organization.

Its domestic sugar production is estimated at around 1.4 million tonnes, with Iran typically importing and refining around 1.3 million tonnes of raw sugar, other estimates showed.

Trade sources estimated Iran is set to import 500,000 to 600,000 tonnes of raw sugar in the final quarter of this year.

One of the trade sources expected Iran to resume imports of around 1.2 million tonnes of sugar in the 2015/16 year.

“Having GTC in the driving seat on imports means easier funding allocations, which will help with imports,” one of the trade sources said.

Iran was never barred from buying food under Western sanctions over its disputed nuclear program, but EU and U.S. sanctions have made trade more difficult by hindering payments and ocean shipping.

International banks and most insurers are likely to steer clear of dealing with Iran for some time, fearing they could face more fines from U.S. regulators.

An Iranian government regulation document seen by Reuters on Wednesday showed Iran had imposed import duties on wheat and barley which would impact private buyers but not state entities like GTC.

Trade sources said raw sugar imports were so far not affected by the import duties on grain commodities.