Iran has not managed to buy palm oil from Southeast Asia despite paying for some backdated orders with other currencies apart from the U.S. dollar as Western sanctions bite, traders said.
Palm oil, used for cooking, has grown increasingly difficult for Iran to secure as the United States and Europe impose tough financial sanctions to stop its nuclear weapons programme.
Middle East and Southeast Asian traders said Iranians have been offering $20 (12.77 pounds) to $30 per tonne more for palm oil from top producers Indonesia and Malaysia, but no deals have been signed in the past month though food is not included under sanctions.
In early January, Southeast Asian traders told Reuters that Indonesia and Malaysia had stopped exporting directly to Iran over payment problems since late last year.
Nothing new has been signed. There were some Iranians at a palm oil conference in Kuala Lumpur last week looking to make deals but nothing came out of that, said an official with a Saudi food company with an edible oil refinery in Iran.
It is difficult for us to run our own refinery. Freight costs are high and many of the companies in Iran are still waiting for a backlog of shipments to come through. These are deals made much earlier but the payment issues block this.
EUROS OR YEN
In February, cargo surveyor Societe Generale de Surveillance (SGS) reported that 27,100 tonnes of refined palm oil were exported to Iran, which traders said was clearing off a backlog of orders made last year.
But in the first 10 days of March, no other Malaysian shipments to Iran were reported, data from SGS showed.
There are no more direct deals with Iran. Some parties have been paid, mostly in the form of euros or yen, said a trader with a Malaysian palm oil firm that used to deal with Iran.
I don't think they will use the euro route since it is still hard to process payment and banks are getting very wary.
Iran has yet to execute barter trades with Indonesia and Malaysia as seen with India, which is keen to step up exports to the Islamic Republic in a range of goods to settle part of its oil dues to Tehran.
The lack of barter trades in the palm oil sector suggests that there are still some edible oil stocks in Iran, said a Dubai-based trader dealing with the country.
From what the Iranians have told me, there is at least one month's worth of edible oil stocks in the country but it's being used on a hand to mouth basis. It will last for a bit but not for long, he said.
Traders in Malaysia said that Iran was considering importing palm oil via India, which is the world's biggest importer of the vegetable oil and using a rupee payment scheme.
Yet, edible oil exporters in India say they have not heard of such deals as New Dehli will tax re-exported cargoes of palm oil, lifting costs.
Of course no one will really talk about such deals. One way around it is to discharge the palm oil at sea into another ship heading for the Middle East, said B.V Mehta, executive director of the Mumbai-based Solvent Extractors' Association of India. But nothing is confirmed, no one really knows.
(Editing by Jacqueline Wong)