Malaysian exporters stop supplying Iran with palm oil-sources

Reuters: Malaysian palm oil exporters have stopped supplying most of the 30,000 tonnes of the food staple that Iran buys monthly from the Southeast Asian producer as Western financial sanctions against Tehran stymie payments, said two trading sources. KUALA LUMPUR Feb 8 (Reuters) – Malaysian palm oil exporters have stopped supplying most of the 30,000 tonnes of the food staple that Iran buys monthly from the Southeast Asian producer as Western financial sanctions against Tehran stymie payments, said two trading sources.

Sanctions spearheaded by the U.S. and European Union have made it difficult for Iranian palm oil buyers to use letters of credit and make payments via middlemen in the United Arab Emirates (UAE) to Malaysian exporters.

“Most of the companies selling palm oil to Iran have stopped since the end last year,” a trader with direct knowledge of the deals told Reuters on Wednesday.

“Payments are not coming through and no palm oil shipper wants to risk sending the cargoes to Iran with such a tense political situation,” added the trader, who declined to be identified due to the sensitivity of the issue.

The United States slapped fresh sanctions on Tehran from the start of this year, targeting financial institutions that deal with the central bank, hoping to stem oil revenues and persuade Iran to abandon a suspected nuclear weapons programme. (Reporting by Niluksi Koswanage; editing by Stuart Grudgings)