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                                        Volume. 11875

Iran buys cargoes of Indian raw sugar in rare deals
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LONDON (Reuters) - Iran has bought up to 100,000 tons of Indian raw sugar in rare deals as a wider number of foreign suppliers aim to sell Tehran agricultural commodities after last month's nuclear deal.
 
Trade sources said Iran in recent weeks had picked up cargoes of Indian raw sugar for shipment in early 2014, which total around 100,000 tons.
"India does not have a need for some of their own surplus sugar. So there is a window to shift some of that to Iran," one trade source said.
 
"The freight is cheap at below $10 a ton, and some of the consignments (of Indian raw sugar) are moving to Jebel Ali (in the United Arab Emirates) and then onto Iran. Bear in mind this is being transported in small containerized cargoes."
Indian sugar exporters are aiming to fend off competition from rival producers Brazil and Thailand to supply markets such as Iran and Dubai's Al Khaleej refinery, with a freight advantage due to closer distances.
 
Besides shipping the raw sugar to the UAE and then onto Iran, India will transport some of the cargoes directly to the Islamic Republic, a ship order showed this week.
 
"(Iran's state buyer) GTC is signaling more interest for raw sugar cargoes, with more buying to come," another trade source said.
 
Iranian buyers are believed to be using Indian rupees acquired from selling crude oil to India, trade sources said.
 
Iran was never barred from buying food, but EU and U.S. financial measures have made trade more difficult for the past two years by hindering payments and shipping.
 
A breakthrough preliminary deal reached last month in Geneva leaves most sanctions in place for at least the next six months while a permanent deal is hammered out. World powers agreed to "facilitate humanitarian transactions", and the accord is encouraging more companies to boost ties with Iran.
Separately, Iran's GTC has bought at least 300,000 tons of milling wheat in recent weeks to build up its grain reserves.
 
"On the payment side, nothing has really changed, and any benefit from the Geneva deal will take time to filter through," the second trade source said.
"Don't forget there are still sanctions on the banking side, and you need permits to export to Iran. There is, of course, more interest."
 
Trade sources estimated that Iran typically imports 1.3 million tons of raw sugar annually, or a monthly average of 100,000 tons. Iranian sugar consumption is around 2.5 million tons and local production is estimated at 1.1 million tons.

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