January 7, 2014

 

Syria's 2013 wheat imports soared to 2.4 million tonnes

 

 

Syria's state wheat import deals surged to 2.4 million tonnes in 2013 from 550,000 a year earlier, as the country suffered its worst wheat harvest in nearly three decades in 2013 with war and sanctions continued to put pressure on the government to import food.

 

This is according to the country's General Establishment for Cereal Processing and Trade (Hoboob).

 

A source from Hoboob said that the imported wheat was mostly of Black Sea origin and deals were done outside the tender process and paid through unlocked funds in frozen Syrian international bank accounts.

 

The source said that of the total quantity, 1.7 million tonnes arrived in Syria and the remaining quantity is on its way.

 

In October, Syria had struck deals with payment using frozen funds to import 500,000 tonnes of wheat from France and the Black Sea over the summer, Hoboob said

 

Although some traders were sceptical about the 2013 wheat import figure, others said the jump in imports was in line with the government's drive to bolster imports given the record-low local harvest.

 

Sanctions imposed by the EU, the US and other countries on President Bashar al-Assad's government do not apply to food but the financing freeze has hindered Syria's ability to seal import deals.

 

Syria started asking to pay for its food by freeing some of its frozen assets in international banks in mid-2013 but some international traders said the payment method was not attractive as the seller bore the burden of obtaining the necessary approvals to unlock the funds.

 

In September, France cleared the use of frozen Syrian bank assets for food under an EU system that allows such funds to be used for humanitarian ends. Paris-based lender Union De Banques Arabes Francaises (UBAF) confirmed it had approved the release of such funds.

 

State-owned food buying entities through most of 2013 struggled with import tenders for rice, sugar, flour and wheat, although deals were struck outside the tender process using middlemen.

 

Another Syrian state entity, the General Foreign Trade Organisation (GFTO), has been tendering to buy flour, sugar, oils, rice and several other commodities through an Iranian export credit line.

 

The GFTO tenders require sellers to accept payment through a credit line agreement between the Commercial Bank of Syria and the Export Development Bank of Iran. Traders have said that offers in those tenders are well above market prices and come mostly from Iranian firms offering to re-export commodities out of Iran. Hoboob maintained it was not using the Iranian credit line agreement in its deals.

 

Syria has enough wheat to last eight months, according to Hoboob, which traditionally has kept three million tonnes stockpiled, enough for one year's consumption.

 

Despite the availability of imported wheat, flour mills and silos have suffered extensive damage in the unrest that has gripped Syria since 2011, forcing the country that was once self-sufficient in wheat to also import flour.

 

The country's prime minister said last week flour imports were being purchased at a cost of US$580 a tonne to meet daily domestic needs with many of the country's mills out of operation.