Syrians see hoarding, price rises after import ban

AMMAN, Sept 27 Tue Sep 27, 2011 3:04pm EDT

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AMMAN, Sept 27 (Reuters) - Food and consumer goods prices are rising sharply in Syria because of a sweeping import ban imposed last week, adding to the woes of Syrians who have seen hundreds of their countrymen killed in the harsh crackdown on protests against their ruler.

The jump in prices, and hoarding by traders hoping for bigger profits later, coincides with a step change in the drive to remove President Bashar al-Assad, as deserting soldiers join the protesters and fight back against the security forces who, the United Nations says, have killed some 2,700 people.

As Western nations broaden their sanctions against Syria's ruling elite and protests disrupt the economy, the government slapped a ban last week on all imports except grain, raw materials and 51 essential items, to preserve its dwindling foreign reserves.

Traders contacted in Damascus and Aleppo, the country's main commercial hubs, said on Tuesday that average prices had risen by up to 30 percent. Some said they had begun to hide stocks in the hope of selling at still higher prices when shortages bite.

Damascus residents complain that prices of biscuits and crisps, which have already risen during the six months of unrest, have jumped by over 20 percent since last week, while 100 gram bags of coffee and flour have risen 50 percent.

One Damascene businessman, who trades garments imported from Turkey and the Far East, said goods that had been on display in showrooms, ranging from textiles and household accessories to electrical appliances, were being quietly put away in commercial warehouses for now.

"We have stopped selling until the situation clarifies. Most of our models have been put aside. We are now telling customers either what is available has been sold or they have to wait," said a car dealer in Harasta, a Damascus suburb.

Prices of cars still on show have risen at least 10 percent, and one popular Korean model now sells at 2.1 million Syrian pounds, up from 1.8 million, said car dealer Ghayath Yhaya.

Factory owners and some traders say the import ban will wreak havoc on businesses across the country because a lack of imported goods like plastics and paint components, crucial for domestic industries, could put manufacturers out of work.

"As industrialists, we do not keep a large stock of raw materials and rely on the open market to buy stocks as needed. Now panic is setting in. Everyone is looking for raw materials and cannot find any," said Wasim Khattab, who owns paint and plastics factories near Damascus.

"EXTREME DAMAGE"

In an unusually critical public move, Aleppo's Chamber of Industry said in a statement that the import ban would "inflict extreme damage on the national economy" and undermine the competitiveness of local industry by raising costs.

Damascus residents say the effect of the ban, on top of earlier price rises, is already being felt in the city's central markets, which have lost their bustling atmosphere over the past few months.

"Everyone is complaining about the price rises, people are getting really annoyed," one resident told Reuters.

"Normally, at this time of year you can find good discounts on clothes as school and universities are starting, but we are all noticing prices are very high. School uniforms, shoes, bags, they are all rising in price," she added.

The ban is an about-face for Assad, who won support among the business classes when he took steps six years ago to lift the Soviet-style import ban implemented by his late father Hafez al-Assad, who he succeeded in 2000.

Economy and Trade Minister Mohammed al-Shaar told the state news agency SANA that the ban was in the national interest and was needed to counter political turmoil, but that the authorities might expand the list of 51 items which are exempt.

Shaar warned that the state would take tough action against traders who tried to raise prices.

"We have asked traders and industrialists to take into account the interests of citizens. I am ready personally to close any shop that engages in unfair practices on consumers," Shaar was quoted as saying.

Some businessmen support the ban, which they say will help Syrian products which have been hard hit by cheap foreign goods.

Traders at textile workshops in Aleppo and Damascus said they might get more business after Chinese imports left the market.

"Chinese products had been much more popular in recent years because they are more decorative, if not as practical as Syrian products. The ban will help us regain our lost sales," said Muhammad Dahan, who owns a workshop in an industrial zone near Aleppo.

Local furniture makers said they were also encouraged as the ban would halt a flood of cheap Far Eastern and Turkish products -- though they poor consumer sentiment might reduce any gains.

(Additional reporting by Oliver Holmes; Editing by Tim Pearce)

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