UAE Edible Oils Firm Says Iran Client Staying Away

UAE Edible Oils Firm Says Iran Client Staying Away

An Abu Dhabi-based edible oils firm said on Tuesday its Iranian client had stopped making orders due to liquidity issues, highlighting the slowdown in trade as Western sanctions squeeze financing for Iranian companies.

April 25, 2012 10:21 by kippreport

The sanctions, aimed at Iran’s nuclear program, do not target food shipments, but financial measures have frozen Iranian firms out of much of the global banking system, making it difficult for importers to obtain letters of credit or conduct international transfers of funds through banks.

The privately-owned Abu Dhabi Vegetable Oil Co, which imports around 80,000 tonnes of crude vegetable oils a year, said it used to export around 25,000 cartons a month, each weighing around 10 kilos, to a private company in Iran before orders stopped. “They are having difficulties paying so that makes things tough,” AbdulMoiz Khan, the purchasing and logistics manager of the firm, said.

For other Iranian clients who have offices in the UAE and local bank accounts, purchases are smoother, he said.

“Some shipments are still being made where the customers have facilities here and money in local banks, but it’s getting increasingly difficult for others,” Khan said.

Traders have said that Iran, after buying wheat on international markets at a frantic pace in March, would now turn its attention to vegetable oils and animal feed grains. Iran’s state feed agency SLAL started buying corn and soybean meal grain needed to feed the country’s large livestock herds last week as private importers struggled with trade financing.

The Abu Dhabi firm is planning to divert quantities from Iran to other export markets it already deals with, mainly Gulf countries, Yemen, Syria, Lebanon and Pakistan.

The company sells around 30 percent of its production in the UAE while another 30 percent is exported to Saudi Arabia.

(Editing by David Holmes)