Iran is ramping up imports of wheat, including rare purchases from the U.S., in a sign Tehran is building a strategic stockpile of grain in anticipation of harsher sanctions or even military conflict.
The country has bought wheat from the U.S., Australia, Brazil and Kazakhstan in the past few months, and is in talks on what could be a major wheat buy from India, according to market watchers and official data.
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Such a maneuver could bolster the Islamic regime at a time when the West is increasing pressure over Iran's disputed nuclear program, including curbing purchases of Iran's oil and freezing its government banks out of international networks. Current U.S. sanctions allow companies to sell food to Iran.
Access to wheat is crucial for the country, enabling it to prevent spikes in the cost of bread, a key staple among its 78 million citizens. Such spikes have in the past led to social unrest in Iran and elsewhere in the Middle East.
Iran is likely getting ahead of any tightening of sanctions, as well as a further decline in its currency, said Paul Sullivan, a Middle East security expert and adjunct professor at Georgetown University. The Iranian rial has fallen 30% against the U.S. dollar in the past six months, making purchases in U.S. dollars more expensive. "It's clear they're worried about their currency declining and potential war ahead of them," Mr. Sullivan said. "The country is really being squeezed."
Recent dry weather in the region also may lend urgency to Iran's purchases, he said. Iran is due to start harvesting a new wheat crop in May, and could be concerned about lower production, said Chris Gadd, an agriculture analyst at Macquarie, in an email.
Traders are watching purchases by Iran, which often imports relatively little wheat. But wheat supplies are fairly robust at the moment, and the deals haven't sent prices soaring.
Wheat is up just 1.1% in the futures market in 2012, to $6.595 per bushel in the futures market, well below last year's peak near $9.
It is common for countries in conflict to continue to trade with each other. Still, the buys represent a striking contrast to the West's attempts to ratchet up pressure on Iran.
The U.S. Department of Agriculture estimates Iran will import 2 million metric tons of wheat in the year through June. That is a tenfold rise from a February estimate, and enough to cover 13% of Iran's annual consumption, according to USDA data. Industry officials say Iran is also negotiating to buy up to 3 million tons of wheat from India, but it isn't clear if that deal will come to pass.
The U.S. sold Iran 180,000 tons of hard red winter wheat, widely used to make bread. Before 2008, when Iran bought U.S. wheat when its crops were ravaged by drought, the country hadn't bought U.S. wheat for almost three decades.








