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Wednesday 13 February 2019

Iran, Russia, Kazakhstan Sign MoU on Wheat Trade

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TEHRAN (Financial Tribune) — The ministries of agriculture of Iran, Russia and Kazakhstan have concluded a trilateral memorandum of understanding (MoU) on the issue of wheat trade. This resulted from negotiations on a temporary agreement leading to the formation of a free trade zone between the Eurasian Economic Union and Iran, Zol.ru reported.

Trade Minister of the Eurasian Economic Commission Veronika Nikishina was quoted as saying that the signing of a memorandum between Russia and Kazakhstan — key suppliers of wheat to the world market — and Iran will be the first step toward the revival of full supply chains of high-quality wheat from EEU to Iran and the whole region.

Veronika Nikishina said:

We need to consider this event in the context of preparations for the entry into force of the interim agreement signed in May 2018. Belarus, Kyrgyzstan and the Russian Federation have already ratified the agreement.


We are convinced that cooperation with Iranian partners is promising and ready to continue the dialogue in various directions of trade and economic cooperation. In this regard, we look forward to the imminent completion of the procedures for ratification of the agreement from both the EAEU member countries and Iran.

In accordance with the MoU, wheat from Russia and Kazakhstan will be supplied to Iran without customs duties and other fees equivalent to it.

In addition, Iran will allow the transit of wheat through its territory and support the import of wheat as part of the implementation of swap contracts. It will also ensure that existing or future bans, as well as other restrictions on the use, marketing, sale, supply and sale of wheat to Iran will not apply to wheat temporarily imported into Iranian territory for further processing and export.

If the legislation of Iran in this area changes, the Russian Federation and Kazakhstan should be promptly informed about this.

The Russian and Kazakh sides will support the development of a mechanism for providing credit lines to Iranian buyers for buying wheat from them while guaranteeing that the wheat delivered to Iran meets its sanitary and phytosanitary requirements.

Parties to the agreement plan to create a tripartite working group that will address issues related to the supply of wheat in accordance with the memorandum. It is assumed that the group will meet at least once a year.

The memorandum is valid for five years.

According to Kazakhstan’s Deputy Agriculture Minister Gulmira Isayeva, the republic has the opportunity this year to supply 500,000 to 1 million tons of wheat to Iran.

In March 2016, Iran imposed a ban on the import of wheat. Later, deliveries were made only on certain permits and individual contracts.

Prior to this, according to the data of Rusagrotrans JSC, in 2014-15 of the agricultural year, Russia supplied 1.7 mln tons of wheat from Iran’s total imports of 6.3 mln tons in 2015-16 declined to 1.4 mln tons in the 2017-18 agricultural year, while exports decreased to 131,000 tons from 200,000 tons.

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