Iran shrugs off latest US sanctions

Iran castigated its US adversary on Tuesday over new financial measures to disrupt Iranian commerce, and a default on payment for rice purchases highlighted the encroachment of sanctions on the staples of everyday life.

Tehran: Iran castigated its US adversary on Tuesday over new financial measures to disrupt Iranian commerce, and a default on payment for rice purchases highlighted the encroachment of sanctions on the staples of everyday life.

Lawmakers in Tehran vowed to ban crude exports to European countries even before an EU oil embargo takes effect.

The US sanctions, targeting Iran`s central bank and giving US banks new powers to freeze Iranian government assets, were the latest in a tightening web of international measures aimed at forcing the Islamic Republic to scrap sensitive nuclear work.

"It is an antagonistic move, psychological warfare which has no impact... There is nothing new, it has been going on for over 30 years," Iranian Foreign Ministry spokesman Ramin Mehmanparast said, referring to three decades of US-Iranian hostility.

Rice exporters said Iranian buyers had defaulted on payment for 200,000 tonnes of rice from their top supplier India in another sign that Western financial sanctions are playing havoc with trade, even in one of Iran`s food staples.

While a plunging rial has made forward purchases costlier, the sanctions are hampering Iranian traders who have previously used Dubai-based middlemen to keep paying Indian rice suppliers.

Bread and rice dominate the diet of most Iranians, many of whom can no longer afford to buy meat, now selling for about $30 a kilogram in Tehran. Bread prices have tripled since December, while rice costs about $5 per kg. Iranians earn about $350 a month on average. Officials put the poverty line at $800.

Grain ships are docked outside Iranian ports, traders are not booking fresh cargoes and exports of staples to Iran such as maize are falling as collecting payment from buyers gets harder.

Maize is used widely to feed livestock and eventual shortages could force farmers into stress slaughter.

Iran imported 62 percent of its maize, 45 percent of its rice and 59 percent of its sugar in 2010-11, but only 3 percent of its wheat, according to the US Department of Agriculture.

Bureau Report

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