June 25, 2018 / 12:43 PM / 22 days ago

Exclusive: Syria to import 1.5 million tons wheat - minister

DAMASCUS (Reuters) - Syria is planning to import around 1.5 million tons of mostly Russian wheat this year, as local wheat procurement is expected at around half a million tons, the country’s internal trade minister said.

FILE PHOTO: A farmer harvests wheat in a field in Jdeidet Artouz, a suburb southwest of Damascus, Syria June 19, 2017. REUTERS/Omar Sanadiki/File Photo

Imports will mostly be Russian but Syria is also looking to buy Romanian and Bulgarian wheat, Abdullah al-Gharbi told Reuters.

“We are still in the beginning of the season of local purchasing, around 20 days or so have passed from the start of it, but we see our local purchases at between 500,000 tons to 600,000 tons this year,” Gharbi said.

Gharbi also said the country had strategic wheat reserves of more than eight months.

“This is an achievement, look at neighboring Egypt for example, they only have three months and Algeria have four,” he said.

Syria, which was once self-sufficient in wheat under a state-promoted policy, has had drastically lower production since the start of its multi-sided conflict.

It used to produce 4 million tons of wheat in a good year and was able to export 1.5 million tons. The decline in output has put Bashar al-Assad’s government under increasing pressure to import the grain.

Reuters reported last week that Crimea has stepped up grain exports to Syria over the past year in an arrangement that gives the Black Sea peninsula an outlet for its surplus crops and ensures Assad has a reliable source of wheat.

Flat bread is a subsidized staple for Syrians, who have suffered under a conflict estimated to have killed several hundred thousand people and forced millions to flee their homes.

“We will not raise bread prices at all, not for the foreseeable future,” Gharbi said.

“This is a burden on the government of course especially with the higher wheat prices we pay farmers but we will continue to subsidize them,” he said.

Syria is paying its farmers 175,000 Syrian pounds ($400) per ton and additional 30,000 pounds in transportation subsidies.

“Our prices are more than excellent, it is around $225 per ton in Turkey, ours is almost $500,” he said.

The import gap will be fulfilled through international purchasing tenders announced by the state grain buyer, the General Establishment for Cereal Processing and Trade (Hoboob).

Hoboob has already issued a tender with a July 2 deadline for 200,000 tons of Russian, Romanian or Bulgarian wheat.

Hoboob has stumbled on several previous tenders, failing to buy wheat and citing high prices.

Foodstuffs are not restricted by Western sanctions on Assad’s government, but banking sanctions and asset freezes have made it difficult for some trading houses to do business with Syria. Trade with ally Russia poses fewer problems.

Gharbi said a deal with Russia to supply 3 million tons of wheat outside of the tender process that he had announced to Reuters in September was still underway but no wheat had arrived yet.

“We got all the agreements for this and we gave the direct order for the Russians to start the imports but we haven’t received any quantities yet,” he said.

“I think that after the harvest in Russia we will get some.”

Another deal to trade Syrian fruits and vegetables for Russian wheat was also in its final stages.

“The contracts with Russian firms for this are in their final stages,” he said.

Reporting By Kinda Makieh; Writing By Maha El Dahan; Editing by Veronica Brown and David Evans

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