Syria Battles Food Security Issues – By NEENA RAI

Syria is struggling to afford and secure ample food supplies for its domestic population as the European Union’s ban on oil imports puts severe strain on the country’s finances.

As officials warn the country is heading towards civil war under the embattled regime of President Bashar Al-Assad, Syria’s ability to import wheat at affordable prices from abroad is more crucial than ever, after heavy rains caused the country’s production of winter cereal crops to slump.

« The prolonged unrest is often causing disruptions in food distribution channels, leading to localized shortages in several markets, » according to the United Nations’ food body, the Food and Agriculture Organization.

The EU in September implemented an oil embargo against Syria in response to the violent repression of the opposition by the regime.

The impact of the loss of oil revenue is already being felt.

Syria’s state grains agency, which traditionally purchases soft milling wheat via international tenders, is finding it difficult to secure food at competitive prices, European traders say.

The agency Tuesday said it had rejected all tender offers and made no purchase in an international auction to buy 100,000 metric tons of wheat, citing expensive market prices.

The wheat was for shipment within two months of the proposed agreement.

« Lots of European traders in the market are very wary of getting involved with Syria in wheat tenders and indeed we are totally avoiding placing bids, » a European trader said.

European traders told The Wall Street Journal that at present, a risk premium of around $10 a metric ton was being imposed on all wheat supplied to Syria through the private sector.

Shipments of wheat haven’t halted completely. Some companies are using contacts on the ground and knowledge of the situation to circumvent local difficulties, traders said.

Major shipping lines, such as France-based CMA CGM, one of the world’s largest shipping companies by volume and A.P. Moeller-Maersk, owner of Maersk Line, the world’s largest container shipping company by volume, both confirmed that cargo continues to be sent to Syria weekly via hubs in Malta and Beirut. This is so long as cargo is compliant with the applicable rules of embargo.

Yet even if ships do make it to Syrian ports, this doesn’t guarantee the food will make it to consumers.

Traders said there have been numerous situations where vessels containing wheat have docked at Syrian ports, only to be rejected by importers who decline to take the cargo because market prices have dropped during the transit time.

Regions in particular need of food include Al Hasakah and Al Raqqah in the north and north-east, which suffered as rains slashed Syria’s 2011 cereal crop by 11% based on the last five-year average, to 3.95 million tons.

Wheat is an integral part of diet of people from the Middle East.

Syria is looking to import 4.6 million tons of cereals, such as wheat and barley, in the 2011-12 crop year, 700,000 tons higher on a year earlier, partly in response to additional refugees in the country, according to the FAO.

« Syria hosts one of the largest urban refugee populations in the world, with nearly 1 million Iraqis, » the FAO added.

Food inflation in Syria for basic goods remains the main issue for citizens, said Abeer Etefa, the World Food Programme’s senior spokeswoman for the region said.

« As the conflict goes on, it will be increasingly harder to get food into the country as the economic situation deteriorates, whether or not an embargo is eventually placed on food, » Etefa added.

There’s also a knock-on effect to neighboring countries like the mostly landlocked Jordan, which uses Syrian and its ports as a gateway to Europe and Turkey.

« Syrian and its ports form a gateway to Europe and Turkey for the Jordanian economy and a number of its agricultural produce such as citrus, tomatoes and cucumbers, » one shipper said.

« If Jordan can’t export through Syria, farmers for sure will suffer financially, » he added.

source: http://online.wsj.com/article/SB10001424052970204257504577152812303493678.html