Iran to end up with low quality product in case of oil-for-rice barter with Uruguay - expert

Azerbaijan, Baku, April 4 / Trend S.Isayev/

In the oil-for-rice barter with Uruguay, Iran is most likely to end with more low quality rice than it would have if it were buying the rice in the international agricultural commodity markets, since Uruguay has to compete both on quality and price and hence has to ensure the quality of its rice is as good as the other rivals adjusted for price, EU economic advisor Mehrdad Emadi told Trend.

Emadi was commenting on Uruguay's recent proposal to Iran, regarding an oil-for rice barter deal. Uruguay officials said that if Iran is willing to barter oil for rice, currency will be excluded from the deal. Uruguay is Latin America's top rice exporter and an ally to the United States in the region.

Iran used to be a major destination for Uruguayan rice but the impact of U.S. and EU sanctions, aimed at curbing Tehran's nuclear ambitions, has put a strain on financing.

"The proposal made by Uruguay is an effective way of increasing the country's rice export to Iran without facing fierce international competition and allowing it to sell more of its lower quality rice in the deal," Emadi said.

He noted that one of the big issues for Uruguay in expanding its export of rice has been the declining quality of its rice vis-a-vis rice sourced from India, Pakistan and Egypt which have been reported to be more suited to Iranian taste.

"A barter-based trade, rice-for-oil will be highly favourable to the Uruguayan side since it will be significantly more costly for Iran to monitor the quality of rice than it is for Uruguay to monitor the quality of Iranian crude simply since oil is easier and cheaper to grade and the international market has accepted grading-price tables," Emadi explained.

Emadi said that if Iran chooses to accept the proposal it will be able to purchase foreign rice without facing the increasingly suffocating banking restrictions imposed by the United States and the European Union. He added that this kind of choice will be more costly to Iran since within this proposal, Iran can not use international metrics on quality of rice and delivery times to ensure the transaction is the best outcome its oil exports.

"Rice is a perishable and highly sensitive commodity when it comes to the methods of delivery, storage conditions and timeframe under which the rice is transported. Almost on all these Iran has to assume the risks since in barter deals it is the buyer who accepts such risks," Emadi said.

"Similar risks for Uruguay are much smaller since crude is neither perishable nor sensitive to delivery time and methods of delivery. On this basis, the distributions of risks are very asymmetrical and unfavourable to the Iranian side".

Answering the question how such deal would impact the Uruguay-U.S. relations, Emadi said that the strategic position of the U.S. will be enhanced if this proposal is implemented.

"This all depends on the scale of the transaction and the extent to which the U.S. government assesses the deal as a sanction-busting attempt," Emadi told Trend.

He added that if Iran goes for the deal, it would be dealing with a country that is located in an area that is much easier for the U.S. to monitor the flow of trade, interrupt it should it wish to do so, and exert pressure on those agents which facilitate and ensure the completion of the transaction.

American Enterprise Institute Research Fellow Ali Alfoneh believes that Uruguay's proposal to barter oil for rice is a reminder of the United Nation's "Oil for Food Program" imposed upon the Saddam Hussein led Iraq.

"The U.S. would most likely not oppose it because of humanitarian reasons, and because the proposal denies the regime in Tehran access to much needed foreign currency which could be used to advance Iran's nuclear program," he told Trend.

Washington has said that it could slap sanctions on countries that buy crude from Iran. Pressure from Washington and Brussels, which will slap a EU-wide embargo on Iranian oil from July as part of a campaign against Tehran's nuclear program, has led to a rally in oil prices this year as markets fear supply shortages.

In this particular case, Uruguay has offered Iran a deal that would work without involving any currency.

Iran halts flights to 39 countries due to rising COVID: CAO
Iran halts flights to 39 countries due to rising COVID: CAO
Iran's Energy Exchange announces products to be on sale on April 24
Iran's Energy Exchange announces products to be on sale on April 24
Longest tunnel in Iran to be opened by end of spring
Longest tunnel in Iran to be opened by end of spring
Loading Bars
Latest
Italy's cabinet unveils roadmap for reopening starting April 26
Pakistan: Several killed in explosion at Quetta hotel
MSF urges rich countries to back COVID vaccine patent waiver
U.S. commanders seek approval for aircraft carrier near Afghanistan during withdrawal
Britain's Heathrow Airport turns down airline requests for extra flights from India
Qatar reports 819 new COVID-19 cases, 199,180 in total
Uzbekistan reveals number of investment projects implemented with S.Korea, Japan
Azerbaijani gymnast reaches final of European Championship in Basel
Turkey records highest daily COVID-19 deaths toll yet, total nears 37,000
Executive power of Azerbaijan’s Astara district opens tender for overhaul of roads
Georgia introduces new regulation on activation of roaming services
Azerbaijan to increase production of pomegranate in 2021
Iran halts flights to 39 countries due to rising COVID: CAO
NASA, SpaceX delay Crew-2 mission launch to space station
Over 200 mln COVID-19 shots administered in U.S.
Olympic motto may be altered, IOC President says
Turkey extends short-term work pay scheme until June
Uzbekistan Airways plans to discontinue flights to nine countries
Review of Georgia's exports to China
Azerbaijani banks greatly expand mortgage lending volume - CBA
EU provides more details on projects supporting in Georgian energy sector
Iran's Energy Exchange announces products to be on sale on April 24
Extension of contract for dev't of gold-bearing deposit approved in Azerbaijan
Geostat reveals data on China's exports to Georgia
UK records another 2,396 coronavirus cases, 22 deaths
Robert F. Kennedy Human Rights, Nizami Ganjavi Int'l Center to discuss need for human rights advocacy
Armenia demonstrates fascism in relation to historical monuments - Azerbaijani State Committee
Karabakh ceasefire agreement signed, time to move forward - Commissioner for Human Rights
Some Russian airlines receive permission to make regular flights to Azerbaijan
View of Azerbaijan's liberated territories horrifying - Belarus ambassador
Execution of memorandum on improving insurance literacy starts in Azerbaijan
Uzbekneftegaz completes drilling operations on several wells
Number of transactions at Uzbek Commodity Exchange for 1Q2021 increases
EIB to assist Uzbekistan in developing credit line for project in Aral Sea region
Longest tunnel in Iran to be opened by end of spring
WB expresses readiness to provide digital transformation support to Azerbaijan
Iran creating water trading market
Volume of credit investments in Azerbaijan's economy declines
Iran’s Bahar Azadi gold coin price rebounds
WB predicts fall in gold prices in 2021
Kazakhstan to establish new mobile operator
Exports markets demonstrate growing demand for Georgian medications
Kazakhstan talks ongoing work to open CLAAS agricultural vehicles' assembly plant
Turkmenistan's Turkmenbashi refinery to launch production of Jet A-1 aviation fuel
Uzbekistan, Latvia consider prospects for co-op in ICT
Azerbaijan shows footage from Bash Garvand village of Aghdam district (VIDEO)
Postal operators of Azerbaijan, Turkey launch money transfer service at favorable tariffs
India’s crosses a Landmark with Cumulative Vaccination Coverage more than 13 Crores
SOCAR Ukraine bidding for Odessa Port Plant’s tender
London Bridge station reopens after suspicious item investigated
Uzbek-Korean JSC announces tender for transport services
PM Modi to address virtual Leaders' Summit on Climate tomorrow
Turkmenistan's Turkmengeology opens tender for purchase of equipment
Delayed tourism recovery affects Georgian economic growth forecast
India gets elected to three UN ECOSOC bodies
Turkmenistan's Turkmengas opens tender for purchase of chemical products
UK extends G7 Foreign Ministers' meeting invite to India
Kazakhstan’s national postal service operator to buy spares via tender
Georgia prepares for UN Food Systems Summit 2021
Azerbaijan shares data on number of vaccinated citizens for Apr. 21
Azerbaijan confirms 2,075 more COVID-19 cases, 2,480 recoveries
Iran Khodro declares amount of money to be saved
IRICA discloses details of Iran’s trade turnover with neighboring countries
Turkey reveals volume of goods received at Bandirma port in 2M2021
Georgian commercial banks see increase in profits
Industrial parks will also operate in Karabakh zone - President Aliyev
COVID-19 stalls launch of direct flights between Kazakhstan, US - ambassador
European countries to resume J&J COVID vaccine deliveries
Azerbaijan discloses volume of vehicles assembled at Ganja Automobile Plant
Dutch Stone City Energy to build TPP in Uzbekistan’s Surkhandarya region
WB names amount of allocations to countries against COVID-19
Carbamide production in Azerbaijan to grow, WB forecasts
Baku Stock Exchange holds auction on placement of CBA short-term notes
Turkmenistan's gas compressor plant contributes gas supply to oil wells
Eurasian Development Bank to support hospitals construction in Kazakhstan
Number of Kazakh companies increases in Turkey
Turkey unveils volume of cargo shipment through Kocaeli port
Onion exports from Georgia up, while imports decrease
Azerbaijan's Ganja Automobile Plant looks to enter markets of EAEU, neighboring countries
TCO talks release of excess amount pollutants at Kazakhstan’s Tengiz field
Azerbaijan eyes to introduce biometric e-signature system
Verizon loses more-than-expected wireless subscribers
Pace of Turkmen industry dev’t accelerating
Volume of Azerbaijan's 1Q2021 oil export to Spain disclosed
Austria increases import of Turkish-made chemicals
Silk Way West Airlines named ‘Cargo Airline of the Year 2020’
Turkey's 1Q2021 furniture export to Austria shows increase
Turkey's furniture export to Iran up
WB says global coal prices to jump in 2021
Cost of electricity imports to Georgia increase
Iran's Jam Petrochemical Complex sees increase in sales
Ukrainian Bees Airline plans to carry out Kyiv - Tbilisi - Kyiv flights
Azerbaijani state budget receipts through State Customs Committee exceed forecasts
Israel and UK consider green travel corridor
Chanel loses European court fight in trademark dispute with Huawei
Azerbaijan records decrease in lending to communications, transport sector
US committed to help diversify economic opportunities for people of Kazakhstan
101-year-old Malaysian INA veteran honoured
Roaming tariffs to be decreased within Eastern Partnership over next 5 years – deputy minister
Kazakhstan increases exports to UK
All news