Why a downed airliner in Iran worries Canada’s soy farmers

Ron Davidson, executive director of Soy Canada, listened wearily Thursday as Prime Minister Justin Trudeau announced that preliminary evidence showed that an Iranian missile, perhaps errantly, shot down a Ukrainian airliner, killing more than 60 Canadians.

“The bottom line is we’re concerned about Iran,” said Davidson, whose organization represents Canada’s soybean industry. “We need it as a market.”

Iran imported C$225.4 million of Canadian soy in the first 11 months of 2019, making it one of the largest markets for Davidson’s members. It could easily become collateral damage as tensions rise between the countries.

Addressing reporters in Ottawa Thursday afternoon, Trudeau said his government would consider additional sanctions and other economic repercussions if Iran fails to undertake a credible and transparent investigation into the Jan. 8 crash of Ukrainian International Airlines Flight 752 in Tehran.

“I want answers. That means closure, transparency, accountability and justice,” Trudeau said. “This government will not rest until we get that.”

The Boeing 737-800 crashed minutes after taking off from Tehran Imam Khomeini International Airport. All 176 people aboard the Kyiv-bound flight died, including 63 Canadians and 75 passengers destined for Canada.

Trudeau said Canadian and allied intelligence pointed to a surface-to-air missile as the likely cause of the crash, and that it may have been fired in error. The Iranian government in a subsequent statement denied that a missile had brought down the airliner.

Canada already has economic sanctions on Iran, which exported just C$27 million during the first 11 months of 2019, most of it food. The existing sanctions also limit the damage that Ottawa can do from a trade standpoint.

“Because of the sanctions, there’s not much coming in from Iran,” said Bijan Moayedi, an Iranian-Canadian freight forwarder in Toronto.

In Iran, soy industry found refuge from trade wars

For Canada’s soy industry, the escalating tensions between Canada and Iran represent yet another potential costly chapter in the trade wars.

Soy growers lost access to their largest market, China, after Canadian authorities arrested Huawei executive Meng Wanzhou in Vancouver in December 2018. The industry push into Iran, along with Bangladesh, has helped make up for some of that loss.

Davidson said losing access to the Iranian market would hit an already bruised industry hard. Iran, on the other hand, can survive without Canadian soy.

“They’ll just buy soy from someone else,” Davidson said.

For Moayedi, who immigrated to Canada in 1988, the crash and the loss of so many members of the Iranian diaspora hits close to home.

“What happened yesterday is a tragedy,” Moayedi said.

Small trade lane links Iranian-Canadians to Iran

Moayedi, who is semi-retired, helps food shipments clear Canadian customs before they go to supermarkets that serve Iranian communities. He also helps members of the Iranian-Canadian community send small shipments of personal effects to families back in Iran.

The crash also could complicate the already challenging business of moving goods between Canada and Iran, which has limited connections owing to international sanctions and capacity constraints.

Getting even small amounts of cargo to Iran can be a struggle. His last customer sent four suitcases and a used TV to Tehran. It traveled via Ukraine Airlines to Kyiv. While the luggage traveled to Tehran on a connecting flight, Moayedi had to secure a truck for the TV because it was too large for the narrow-body aircraft on the route.

Beyond the challenges in navigating supply chains, Moayedi noted the human cost to any further deterioration of relations between Iran, Canada and other countries.

“I hope everything will be OK,” he said. “The sanctions are killing people.”