Wednesday, August 27, 2008

Iran Turns To The Great Satan For Grain

Push comes to shove:
Wracked by drought, Iran has turned to the United States for wheat for the first time in 27 years, marking a setback for Tehran's search for agricultural self-sufficiency.

According to a recent US Department of Agriculture report, Iran has bought about 1.18 million tonnes of US hard wheat since the beginning of the 2008-2009 crop season in June.

The number, which has been growing steadily all summer, already represents nearly 5.0 percent of US annual exports forecast by the USDA.
The question though is how to interpret the fact that Iran is willing to buy the grain from the US instead of waiting for the grain to become available from another country. Not surprisingly, there is more than one way of looking at it--
Wachovia's Nelson underscored the tense US-Iranian relationship for many years: "it is still surprising that they are buying wheat from the US instead of waiting to buy wheat from someone else."

Analysts noted that Tehran could have used an intermediary, like Syria, to import US wheat to avoid having the sale recorded in official data.

"Maybe the relationship between Iran and the US is not as terrible as it has been," Nelson said.
On the other hand, maybe Iran is thumbing its nose at the US at the same time that it is buy their wheat:
For Djavad Salehi-Isfahani, a specialist on Iran at the Brookings Institution, a Washington think tank, the US wheat purchase signals "Iran is more interested in showing to its people that it is not restrained by sanctions."

"The real signal is: look, we're doing fine, we can buy wheat from the US!," he said.
The only thing that is unmistakable is the clear failure of Iran's economic policy
"This is a serious setback for Iran from a domestic point of view because they made a big deal about self-sufficiency in grains."
And this time, we are talking about an Iranian failure that no amount of photoshopping can cover up.

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