You're reading: Iran’s ships stopped from shipping Ukrainian grain

Traders are no longer booking cargoes on Iranian ships to transport grain exports from Ukraine because of difficulties with payments following European Union sanctions on Iran, traders said on Wednesday.

"The issue has nothing to do with the government of Ukraine," one Ukrainian trader said. "Traders cannot book Iranian vessels because banks refuse to transfer money to Iranian companies due to the embargo."

Dealers said the development seemed to be another impact of European Union sanctions imposed on Iran to step up pressure because of its disputed nuclear programme.

Around 400,000 tonnes of grain largely from Ukraine and Russia is held up on about 10 ships stranded outside Iranian ports because of payment problems and trade disruption following the EU sanctions.

The EU agreed last week to freeze the assets of Iran’s central bank as part of further sanctions.

"The indication is that Iranian flag ships would not be welcomed (at Ukrainian ports) that is the guidance that is being given." one trade source said.

Another trade source said it appeared that commercial companies were unwilling to transport any cargoes bound for Iranian ports.

"They will not load vessels bound for Iranian destinations or Iranian ships," another trade source said. "It is not entirely clear if this has come from the government and it looks like companies have to make their own decisions on what to do. EU sanctions are very much part of the considerations."

Ukraine’s Transport Ministry said there were no restrictions on Iranian ships. "Nobody knows anything about this," a ministry spokesman said. "All our ports are open to foreign ships. There are no restrictions, nor can there be any."

The tougher EU trade embargo has meant major EU banks have pulled back from financing grain shipments to Iran, a major importer of food and animal feed.

"The trade in Iranian food is getting extremely difficult as the impact of the sanctions is still developing each day," a European grain trader said. "Ukraine has been a leading supplier of grain to Iran. Now it appears Iranian buyers will only be able to buy with delivery to Ukrainian ports and will face further difficulties in arranging shipments."

According to data from the UkrAgroConsult consultancy, Ukraine exported about 445,000 tonnes of grain to Iran in the first half of the 2011/12 season. This included 92,000 tonnes of feed barley and 357,600 tonnes of feed maize"