Sanctions limit Gulfood deals for Iranian vendors
Iranian companies are struggling to complete lucrative contracts at the Gulfood exhibition as economic sanctions limit their ability to do business with foreign partners.
Behrooz Rezazadeh, the chief executive of PSDC Group, which represents companies from Iran at the exhibition, said that there had been high demand for the country's food products this year but that tightening UN, US and EU sanctions made it difficult to manage a deal through to completion.
"The visitors to the Iran pavilion have increased in the first two days of the exhibition this year compared to 2011," he said.
"But when they are starting to make a deal, it's certain that they will find trouble along the way."
He said the biggest obstacles for two parties working together were obtaining letters of credit, transferring money or financing to pay for shipments.
Reuters reported this month that the UAE Central Bank had also told lenders to stop financing trade with Iran.
"I hope the sanctions business will be finished soon," said Mr Rezazadeh. "Iran is a big country. It's not easy to stop the Iranian businessman.
"We have 8 million Iranian people outside the country and we have relationships outside the country."
About 8,000 Iranian traders and trading firms are registered in Dubai.
The Iranian pavilion at Gulfood has increased from 33 companies last year to 46 this year, and Mr Rezazadeh said 52 had wanted to make the trip to the UAE.
Millions of dollars of deals are expected to be completed at the four-day Gulfood event, which ends today, as 3,800 companies in 110 pavilions represent countries from around the world. "We can expect that this year will be harder because of the sanctions," said Mr Rezazadeh.
"But Iranian companies have a long history in this region."
The Dubai Chamber of Commerce and Industry is still encouraging its members to trade with Iran as long as they do not breach international sanctions.
But the UAE has come under increasing pressure to sever its ties to the Iranian financial system after the US deemed it a money-laundering concern.
In the first half of last year, re-exports from the UAE to Iran rose by 36 per cent from the same period a year earlier to Dh19.5 billion (US$5.3bn), according to the latest data from the UAE Customs Authority.
Mr Rezazadeh said there was strong demand for Iranian food products such as saffron, nuts, dates and fruit juices.
He said the products would be bought and branded by different countries to avoid being branded Iranian.
"Iran is a big source of natural products, but Iranian companies are weak in international power brands.
"They have brands but only inside the country. Outside the county nobody knows them."
Published: February 22, 2012 04:00 AM