Sanctions side-effect: Iran's food system hit

Iran's food distribution system is in crisis even though Western sanctions do not directly target the market, badly hurting the poor and turning some staples into luxuries.

Private importers are shrinking away from deals made risky by turmoil in the rial currency, and many foreign banks are reluctant to finance even trade exempt from the sanctions for fear of drawing fire simply for doing business with Iran.

The result is that the Iranian state is under growing pressure to import and allocate more goods as it tries to avoid any social unrest due to shortages and soaring prices.

An increasingly shaky state apparatus will struggle to fill the gap often left by private companies, analysts say.

"If you are talking about the number of deals needed for a country of 75 million ... you do not have an organized overall strategy for finance, purchase and distribution. I do not think they can cope with the challenge," said Scott Lucas, a specialist in Iranian affairs at Birmingham University.

"Even if the sanctions were lifted, which is a huge if, the problems in the system are now so endemic I think they face real serious structural problems."

Sanctions led by the United States and European Union, designed to halt Iran's nuclear program, are strangling the economy and particularly energy exports, but so far Iranians do not face a widespread humanitarian crisis.

Nevertheless, many foreign foods are hard to find and high prices mean Iranians cannot always afford even basic items.

Hossein, a Tehran shopkeeper, described the problems faced particularly by the poor. "A few days ago an elderly woman came to my shop to buy 12 eggs, but when I told her how much she had to pay, she decided to just take five. I really felt bad because she is old and lives by herself," he said by telephone.

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