South Africa plans big food sales to Iran once sanctions ease

Black South African commercial farmer Motsepe Matlala inspects the maize growing on his farm near the small town of Ermelo in Mpumalanga province in this 2006 file photo. REUTERS/Siphiwe Sibeko

JOHANNESBURG (Reuters) - South Africa should get ready to increase exports to Iran of food, notably maize, so it can challenge rival suppliers such as Russia and India in this major market once sanctions against Tehran are eased, its farm ministry said.

The Department of Agriculture and the National Agricultural Marketing Council said South Africa should take advantage of limited food production in Iran and export its maize, sugar and vegetable oils to the country.

"(Iran) trade figures show a quick shift from wheat towards maize imports, which indicates a great opportunity for South Africa," they said in a joint trade report this week.

The European Union and the United States have imposed sanctions aimed at discouraging Tehran's nuclear programme, which they say is designed to produce weapons. Iran says the programme is for peaceful purposes.

The sanctions do not target food or animal feed shipments, but financial measures have frozen Iranian firms out of much of the global banking system, making it hard for them to pay for imports.

The report said although sanctions against Iran discourage South African exporters, a "close look at the Iranian market will prove beneficial in the long run."

It said the strong presence of countries such as Brazil, Russia and India in the Iranian food market should "trigger South Africa's attention to look beyond the frames of U.N. sanctions and strategically position the country to be relevant in the market, should sanctions be lifted."

South Africa is the continent's major producer and exporter of maize. Maize farmers have secured new exports markets in countries such as Taiwan, Japan, South Korea and Mexico after big harvests in neighbouring states limited its market scope in its own region.

The report did not make any suggestions on how South African traders could receive payments for exports while sanctions remain.

Iran last bought South African maize in the May 2011-April 2012 marketing season, when it purchased 40,800 tonnes of yellow maize.

In 2012, South African exports to Iran fell 46.7 percent to 372 million rand from the previous year.

Imports into South Africa amounted to 10.1 billion rand, a 63 percent decline compared to 2011, largely due to a fall and then a halt in oil imports from Iran following the sanctions.

South Africa used to import a quarter of its crude oil from Iran but the purchases have remained halted this year.