Russia plans to increase its exports of grains and vegetable oils to Iran via the Caspian Sea in the coming months. This initiative comes on the heels of an expected larger harvest and the lifting of certain trading restrictions. Last year, trade between Russia and Iran rose by 16%, reaching a total of $4.8 billion. This trade primarily flows through the Caspian Sea, which is bordered by Russia, Iran, Kazakhstan, Azerbaijan, and Turkmenistan.
Market analysts believe there is significant potential for expanding shipments of corn, barley, and sunflower oil to Iran. According to Andrei Kucherov, head of agriculture at Reksoft, the expected demand can lead to a substantial boost in Russian exports. Igor Pavensky, chief analyst at a rail carrier, suggested that Iranian imports of Russian wheat could triple to between 3-4 million tons in the upcoming season, while imports of corn and barley are also expected to rise. Iran is currently the largest importer of Russian corn and the second-largest for barley.
After a brief hiatus due to last year’s good harvest, Iran resumed wheat purchases from Russia in March and became the third-largest buyer by May. Dmitry Rylko, head of IKAR consultancy, indicated that the anticipated record harvest of sunflower seeds, along with favorable conditions for corn, barley, and wheat, supports the potential for increased exports to Iran. Moreover, amid these developments, Afghanistan is also in discussions with Russia for food imports. Analysts expect a grain harvest in Russia to reach 135 million tons this year, including 90 million tons of wheat.
However, Iran’s harvest is projected to be lower due to drought conditions. With market preparations for the new grain marketing season starting on July 1, Russian traders are keenly engaging with their Iranian partners to finalize purchases as they anticipate robust demand.