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Iran evades US sanctions by paying with gold

Iran bought 200,000 tons of Australian, and possibly US, wheat last week with gold. Commodities traders say Iran is also pitching oil barter deals for grains.

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Mature wheat grows in a field near Chinchilla, Australia. Iran is buying wheat with gold and oil, say commodities traders.

REUTERS/Tim Wimborne

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Iran is seeking to close grain purchases using gold and oil as payment, and has paid in yen for a large volume of wheat in its first deal since Western sanctions against Tehran started choking imports of food staples, European wheat exporters said.

Iran bought at least 200,000 tonnes of soft wheat on the world market last week for prompt delivery from private sellers - mostly of Australian origin - but some traders said the United States could possibly account for part of the volume.

New financial sanctions imposed since the beginning of this year to punish Tehran over its nuclear program have ended up playing havoc with Iran's ability to buy imports and receive payment for key food items.

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The sanctions have drastically cut its ability to obtain euro and dollar denominated financing, forcing Tehran to find alternative ways to pay for its imports.

Traders believed the Iranian government had used companies based in Switzerland capable of financing themselves in Asia, and used yen-based contracts to finance the 200,000-tonne deal.

A fall in maize supplies from major exporter Ukraine due to sanction-related payment problems prompted Iranian animal feed makers to turn to wheat, reducing volume for food and compelling the Islamic Republic to turn to the world market.

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