Despite the easing of sanctions against financial institutions writing letter of credit (L/C) business with Iran, reports are continuing to emerge that documentary credits for imports to the Islamic republic remain hard to come by.

Hundreds of thousands of tonnes of wheat, soybeans and sugar are now said to be stranded outside Iranian ports, even though food cargoes are not barred under international sanctions imposed on Iran.

Stranded cargoes

The shipments are apparently stuck because importers are unable to access funds to pay for and release the cargoes.

Quoting a European trade source, Reuters reports that importers are experiencing multiple difficulties obtaining trade finance and that western banks remain reluctant to write L/C business, choosing to steer clear of any deals with Iran named in the paperwork.

Official confirmation

An Iranian official confirmed to the news agency that international banks remain unwilling to provide L/Cs and that dozens of ships are stacked up outside Iranian ports.

In March, the governor of the Central Bank of Iran said talks were advancing to restore banking relationships to allow the Islamic republic to write L/C business on a normal basis (DC World News, 12 March 2014).

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