New EU sanctions have made it impossible for grain exporters to obtain letters of credit (L/Cs) for food imports to Iran.

The tougher sanctions have also left around 400,000 tonnes of grain in around a dozen ships left stranded outside Iranian ports for up to three weeks.

Financing refused

In January, the EU said it would freeze the assets of Iran's central bank as part of an international programme of sanctions aimed at curbing the Islamic republic's nuclear ambitions.

According to one European grain trader, the accumulation of sanctions has caused major EU banks to refuse financing grain shipments to Iran.

No L/Cs

"The myriad of sanctions have worked to the point where the Iranian banking system is virtually defunct, thereby not allowing international trade houses to receive workable L/Cs," the grain trader told the Reuters news agency.

"Their ships are stopped while people figure out how to get payment done, it's a mess," he added.

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