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Sehaty Foreign Exchange

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Iran says open for U.S. wheat at right price

CANBERRA, April 4 (Reuters) - Iranian Agriculture Minister Issa Kalantari said on Tuesday his country was open to buying U.S. wheat after Washington eased trade sanctions with Tehran.

"American wheat does have a number of conditions such as protein, such as price, and if they are competitive there is no doubt that Iran would be one of the purchasers," Kalantari told a news conference here.

"But it should be mentioned that under the same conditions we do give priority to the countries with which we have a close bilateral relationship."

Iran had refused to buy U.S. wheat since 1981 after the U.S. imposed trade sanctions over allegations of Iranian involvement in the development of nuclear weapons and international terrorism.

However, Washington's decision to ease sanctions on some Iranian exports last year and also in March opened the door for increased U.S. grain sales to the Islamist state, threatening a market dominated by Europe and Australia.

International grains traders have pointed to the purchase of 600,000 tonnes of U.S. corn by private Iranian buyers since the U.S. lifted sanctions last year although Kalantari said he could not comment on the extent of wheat trade with the U.S.

Iran is one of Australia's main wheat customers, buying 1.66 million tonnes in 1998/99, and taking over one million tonnes since the current 1999/00 shipping year began in October up until March.

"No doubt (trade with the U.S.) might create some limitations on Australian wheat but you should try to compete," said Kalantari after a regular joint ministerial meeting with Australia's Trade Minister Mark Vaile.

He said Iran's current trade imbalance with Australia was weighted about six to one in Australia's favour and this needed to be adjusted.

"Right now we are under pressure from other countries where the balance of trade is in favour of Iran -- why are we not immporting goods from their countries with the main emphasis on the European countries," Kalantari said.

Vaile said Australian producers were aware of the competitiveness of the market.

"Like any other market that Australian producers compete in ... quality and price and security of supply are all very important elements," Vaile told the news conference.

"The commercial sector is working very hard to ensure we at least maintain our market share if not increase that."

Iran produced around 12 million tonnes of wheat in the year to March 20, 1999, according to a ministry of agriculture report. It said this represented an average 7.9 percent increase each year since 1988.

But Iran is forced to import large amounts of wheat to meet growing domestic demand caused by a population boom.


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