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Deal sealed to barter Pak wheat for Iranian products.

After almost a year of haggling, Pakistan and Iran have finalized a barter deal under which Iran will pay for Pakistani wheat with fertilizer and iron ore.

Iran has been pushing such barter deals since Western banking restrictions have made it very hard for Iran to make and receive payments through banks.

Pakistan will start shipping the wheat to Iran this month under the terms of the 1-million ton barter deal tentatively agreed to in August, Muhammad Najib Balagamwalla, chairman of the Pakistani grain exporter Seatrade Group, said.

Iranian wheat imports are usually handled by the private sector but the state had to step in and help this year because of the disruption to trade financing caused by Western banking restrictions.

There were also "some quality issues," Balagamwalla told reporters. Iran has always had problems with Indian and Pakistani wheat, which contain the karnal bunt fungus. Iran has still not finalized any wheat buy from India, repeatedly objecting to the karnal bunt in talks with Indian officials.


The barter deal with Pakistan, first proposed in March with Iran exporting fertilizer and iron ore to Pakistan in exchange for wheat, was deadlocked for months over price and quality.

But in August, Pakistan agreed a price of $300 per ton, an official from the country's Ministry of National Food Security and Research told Reuters.
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Title Annotation:Economy: Money and its impact
Publication:Iran Times International (Washington, DC)
Geographic Code:9PAKI
Date:Dec 28, 2012
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