Syria looks for big wheat purchase

HAMBURG Wed Aug 29, 2012 8:50am EDT

HAMBURG (Reuters) - Syria has issued a large tender for wheat, a commodity not subject to sanctions, as feeding its people becomes harder in the chaos of civil war.

The United Nations has said Syria faces food shortages as tens of thousands of families leave their homes due to heavy fighting and with the harvest neglected during the conflict.

Syria's state grains agency issued a new international tender to purchase and import 100,000 metric tons of soft milling wheat, European traders said on Wednesday.

Trade sources said a reluctance among foreign banks, shipowners and grain traders to sell and transport grain to Syria - even though food is not itself subject to sanctions - had forced Damascus into an array of unusually small wheat purchase deals in past months, many arranged by dealers around the Middle East and Asia.

Traders also said Syria was entering the market at a time of high prices, so a purchase will be more expensive than usual.

Wheat prices have surged about 35 percent since the beginning of June and corn climbed 55 percent as the worst drought in 56 years ravaged grain crops in the United States and drought cut Russia's harvest.

"I think Syria certainly does have a large import requirement but I think a formal international tender might be difficult to undertake with the current sanctions," one trader said.

The tender was issued by Syria's General Establishment for Cereal Processing and Trade (Hoboob). The agency had said in June that it had sufficient supplies from this year's harvest for immediate needs and that it would not issue a new tender until July or August.

"It looks like Syria is going to make an attempt to buy wheat by itself," another trader said. "Sanctions do not ban the sale of food to Syria so they will no doubt get offers."

The tender sought offers in euros, as normal in Syrian grains deals.

The bidding deadline was Sept 10. Shipment was sought within two months from the opening of a letter of credit on the deal.

(Editing by William Hardy)

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