Iran, Thailand eye barter trade as way around US sanctions

“Trade between Thailand and Iran could not increase for a long time because of the sanctions,” Foreign Minister Surapong Towichukchaikul said in Tehran Tuesday. “So we have to try other ways to boost our economic relations.”

Iranian Foreign Minister Ali Akbar Salehi met with Surapong and agreed with the idea, saying he would study the possibility of opening barter trade with Thailand.

Surapong said Thailand could exchange rice for oil and gas. Iran demands more than a million tonnes of rice annually while Thailand is seeking petroleum for domestic energy consumption.

“I think such an arrangement would have no problems with the US sanctions since we won’t conduct money transactions through any US entity,” he said.

“The Americans should show some sympathy on this issue. Iran needs rice for food while Thailand, which has insufficient petroleum resources, wants energy,” he said.

The concept will be thoroughly discussed during the next joint commission meeting in Tehran coming up soon, he said.

Iran consumes about 3.5 million tonnes of long-grain rice annually but can produce only 2.5 million tonnes, he said.

Iran used to order 800,000 tonnes of rice from Thailand annually, but not consistently. The Thai government needs to persuade Tehran to procure rice on a regular basis for Iran’s food security, he said.

Two-way trade reached US$1.1 billion last year, of which $985 million was Thai exports to Iran, mainly rice, electrical appliances, minerals and chemical products.

The sanctions, including those from the United States’ Western allies and the United Nations, have caused a lot of difficulties for the Iranian economy and investment in the country. Thai investors in Iran said their businesses had not yet been hit directly by the sanctions but Washington was mounting more pressure and expanding sanctions to various industries, which might eventually pinch many Thai businesses. 

Some Thai companies here also are preparing exit plans.