January 27, 2017 / 5:13 PM / in 9 months

Yemen's wheat reserves down to three months supply: U.N. official

LONDON (Reuters) - Yemen has roughly three months supply of wheat left to draw from, leaving the country exposed to serious disruption as a central bank crisis cuts food imports and starvation deepens, the top U.N. aid official in the country told Reuters.

A worker waits for customers next to sacks of food grains at a wholesale market after Yemen's biggest traders have stopped new wheat imports due to a crisis at the central bank, in Sanaa, Yemen December 19, 2016. REUTERS/Khaled Abdullah

A decision by Yemen’s internationally-recognized government in August to move the central bank out of Sanaa, the capital city controlled by the armed Houthi movement with which it is at war, to the southern port city of Aden has triggered bigger hardships for Yemenis and paralyzed the bank.

Reuters reported in December that Yemen’s biggest traders had stopped new wheat imports due to a shutdown in trade finance and no import guarantees from the central bank for some months.

Jamie McGoldrick, U.N. Humanitarian Coordinator in Yemen, said the Arab peninsula’s poorest country had only three months left of wheat stocks and that was also likely to be the case for other key food grains such as rice.

“If we have only got three months supply, there is a possibility there will be a gap for a period of time,” he said on the sidelines of a Yemen aid forum in London this week.

“One of the big concerns is how do we get liquidity into the system to allow people like importers to bring in these key commodities?,” he said. “What happens next, no one is quite sure.”

Nearly two years of war between a Saudi-led Arab coalition and the Houthi movement, which is aligned to Riyadh’s arch rival Iran, has left two-thirds of the population in need of aid.

The situation has become more desperate as many Yemenis face destitution after months of unpaid salaries.

“The economy has become part of the conflict equation,” said McGoldrick.

PRIVATE SECTOR CRUCIAL

Since the start of the year some wheat cargoes have been booked for Yemen as importers find ways around the payment freeze. But trade sources say it is not likely to make a major difference given the small quantities involved.

McGoldrick said an “informal economy” brought in some food, but it was not enough to meet the basic needs of the population.

Yemen’s commercial sector was responsible for up to 90 percent of the country’s imports and diplomats have also reiterated they must play a crucial role.

“The entry of commercial goods and humanitarian aid needs to keep flowing and this is the biggest threat,” Antonia Calvo Puerta, head of the European Union’s delegation to Yemen, told Reuters separately at the forum.

“We need to help the private sector to be able to do what they do best and for that we need a functioning (central) bank,” she said, adding that wheat stocks were likely to be even lower than three months worth.

Puerta said “trust and confidence building” needed to be built before the two rival central banks could work together.

She said the World Bank’s announcement earlier this month to provide $450 million in emergency support for Yemen was a first “brave step”.

“They are forcing others to put on the table new solutions,” she added.

The U.N.’s McGoldrick said the Saudi-led coalition still had to be “convinced the problem is that big”.

“Without the money, starvation is looming large,” he said.

The U.N. has flagged separately it will need around $2 billion this year for humanitarian work in Yemen in what it says is now the “largest food security emergency in the world”.

U.N. Emergency Relief Coordinator Stephen O‘Brien told the Security Council on Thursday “famine is now a possible scenario for 2017” if no immediate action is taken in Yemen.

Editing by Veronica Brown and David Evans

Our Standards:The Thomson Reuters Trust Principles.
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