A shipment of food from Iran has reached Venezuela, supplementing shipments of gasoline, Reuters reports. Venezuela and Iran have found common ground under U.S. sanctions, but additional restrictions could be placed on the tankers, potentially blocking their access to global ports and putting Venezuela's ability to finance imports at risk. Iran threatened to retaliate against U.S. shipping if measures were taken to block shipments.

Panjiva data for Venezuelan imports in 2019, retrieved via S&P Global Market Intelligence's XpressFeed system, shows that the majority are focused on food. Soybean oil is the top import, totaling $147.5 million in the first 11 months of the year. Imports of milled rice and rough rice accounted for $45.3 million and $53.0 million, respectively, while prepared fish totaled $68.3 million dollars.

The only non-food product in the top five is rubber with $92.3 million of imports, illustrating the depth of Venezuela's economic crisis.

There may be alternatives to Iran in extremis. Mexico's President, Andrés Manuel López Obrador, has said the country may sell oil to Venezuela for humanitarian purposes if needed. This could potentially create tensions between Mexico and the U.S. on the eve of USMCA implementation in July. Previously, Mexico had engaged in an oil-for-corn trade, as discussed in Panjiva's research of March 13. That led to U.S. sanctions being applied against Mexican entities that resold Venezuelan oil on June 18, S&P Global Platts reports.

In 2019, Mexico exported $195.7 million dollars of cereal grains, including rice, to Venezuela, including shipments associated with Cargill Inc. and Casillo Commodities Italia SpA as consignees. In the first quarter of 2020, the dollar value of shipments associated with Cargill has increased by 94.8% year over year. Activity associated with Casillo has trended the opposite direction, reporting no shipments in the first quarter, and falling 63.6% year over year in the fourth quarter of 2019.

Eric Oak is a researcher at Panjiva, which is a business line of S&P Global Market Intelligence, a division of S&P Global Inc. This content does not constitute investment advice, and the views and opinions expressed in this piece are those of the author and do not necessarily represent the views of S&P Global Market Intelligence. Links are current at the time of publication. S&P Global Market Intelligence is not responsible if those links are unavailable later.