Iran, Brazil raise barter trade as Ukraine war weighs on plans

Iran is likely to step up corn imports from Brazil, with a urea cargo about to set off for the South American country next week under a barter arrangement.

Iran sources 60% of its corn supplies from Brazil and the rest from Ukraine and Russia. It could import 100% of its needs from Brazil if the conflict between the east European neighbors persists, head of Iran-Brazil chamber of commerce, industry and agriculture Fakhreddin Amerian said Monday.  

"The barter of urea as fertilizer with livestock input from Brazil starts next week when a urea shipment will be sent and corn will be imported in exchange," he told reporters.

Iran began sending test cargoes to Brazil, a new market for Iranian petrochemicals exports, in mid-2019 but the trade ran into trouble when Iranian vessels were stranded at Brazilian ports for weeks after state-run oil firm Petrobras refused to sell them fuel due to sanctions imposed by the US.

Last week, Brazil's Agriculture Minister Tereza Cristina traveled to Tehran where she signed an agreement for the barter of urea with corn.  

Iran is currently exporting 400,000 tonnes of urea to Brazil a year, but they seek to raise it to 2 million tonnes, Agriculture Minister Javad Sadatinejad said.

With Brazil, Iran's annual trade stands at $100 million which the two countries can raise to $1 billion, Amerian said.

He touched on the threats and opportunities which the Ukraine crisis may hold in store for Iran.

"The Russia-Ukraine crisis can create a good market for the export of our urea and other petrochemical products, because Russia is our main rival in such products."

However, the conflict is also set to disrupt Iran's investments in farming in Ukraine in a bid to guarantee food security.

According to Reza Nourani, a member of the Iran-Ukraine chamber of commerce, the Islamic Republic has made various investments in Ukraine's farms due to the richness of the country's soil.

"One of our policies is the production of agricultural products, including grain in Ukraine. The outbreak of war has hampered our overseas farming investment," he said. "We hope that this issue will be resolved as soon as possible with the end of the conflict."

SS