A team of delegates from India are currently in talks with Iran regarding the possibility of Iran buying wheat from India, reports Tehran Times. The two countries have been discussing the issue for over a month.
"The issues related to quality as well as the price will be discussed with Tehran officials," a source said, according to Tehran Times.
A delegation from Iran visited the Indian state of Madhya Pradesh to check the quality of the harvest. Quality has always been an issue of contention between Iran and India. India has a reputation for cutting corners, when it comes to the quality of food commodities. Food crops from India are known to be riddled with disease or fungal infections.
But after testing samples of wheat, Iran has responded positively. The meeting between the Indian delegation and Iran will probably result in a Government-to-Government deal between India and Iran.
Iran and the International Sanctions
Iran has been having difficulty procuring food for its people due to the international sanctions placed against it by the western world. Major international banks no longer support Iran. Consequently, selling its vast oil assets has become a hurdle. The increasing dependence on imports has forced the price of common food products to sky-rocket.
But, several countries in the east have been more than willing to do trade with Iran. In exchange for settling bills for oil and mineral ores, both Pakistan and India are in the process of striking up deals with the Middle-eastern country.
The Government Trading Corporation (GTC) of Iran has also taken matters into its own hands by directly contacting traders in other countries, including those in Europe. Food trade is usually left to private traders, but the government stepping in has opened up a lot more doors than expected.
Fall of the Rial and Hyperinflation
However, the international sanctions coupled with poor policies of the government, has led to the crash of the rial, the Iranian currency. The rial fell nine percent against the dollar last week alone and 40 percent in the last month. At its lowest, the rial was 37,500 to the dollar. After the government intervened and introduced fixed dollar rates, the rial has risen up to around 29,000, reports the Economic Times.
The fall of the rial hit the middle and the lower classes the hardest. They are now struggling to buy common food products including yogurt, chicken, lamb and beef - all of which are considered staple. The price of yogurt, for instance was "2,000 tomans a week ago," but is now around "6,000 tomans," or $5-$6, said Mehdi Khalaji, an Iranian blogger, to the Washington Post. One toman equals 10 rials.
People took to protesting in the streets, shutting down shops and bringing up memories of Egyptian revolution, which originally began as a protest against rising food prices in the country.
Government subsidy programs, which President Ahmedinejad scrapped a while ago, will need to be revived and steps will have to be taken to improve the agricultural sector of the country, if Iran is to decrease its reliance on imports.
The sanctions, on the other hand, are unlikely to be lifted any time soon. The countries in the West seem to be hoping for a complete economic fall-down in Iran. Meanwhile, the common people remain the most vulnerable to the effects of the sanctions.