NEW DELHI - Iranian buyers have defaulted on payment for about 200,000 tonnes of rice from their top supplier India, exporters and rice millers said on Tuesday, as trade between the two countries comes under mounting pressure from a new wave of Western sanctions against Tehran.
While a sharply weakening rial has made forward purchases costlier, financial sanctions are making it difficult for Iranian traders to continue using an unofficial route involving middlemen based in Dubai to keep paying Indian suppliers.
The defaults, totaling about $144 million, were for shipments under term deals in October and November free-on-board Indian ports, Indian traders said. Most Indian rice exporters allow 90 days credit.
India is Iran's top rice supplier, accounting for some 70 percent of its annual requirement of 1-1.2 million tonnes of the grain, mainly the aromatic variety called Basmati.
"It is a serious issue and we do not rule out further payment defaults by Iran," said Vijay Setia, president of the All India Rice Exporters' Association. "We have requested the government to step in."