Jordan has more than 240,000 tonnes of wheat, covering four months of domestic demand, in storage and will step up purchases to benefit from a recent drop in prices, officials said.

"We now want to take advantage of the lower grain prices to build up our stockpile," an official source in the ministry of trade responsible for wheat purchases told Reuters.

The stockpile does not include 100,000 tonnes of Ukrainian wheat purchased last week that was being shipped and was expected to arrive in the second half of June and the remainder in the first half of July.

"These stock levels put us in a very comfortable position," the official source added.

Another official who declined to be identified confirmed to Reuters the drop in global wheat prices from their peaks since mid-March would drive the kingdom to step up purchases in the coming weeks if the bearish market persisted.

The official said this prompted a decision to issue a new tender, for the second time in less than a month, that was announced on Thursday for 100,000 tonnes of wheat with close of bids on May 28.

Jordan paid $396 a tonne, cost and freight, for the Ukrainian wheat, which was almost $100 per tonne less than the country's previous purchase, the official said.

Officials say new purchases would have the goal of maintaining a comfortable six-month supply level of around 390,000 tonnes.

The largest of four silos in the country is in the Red Sea port of Aqaba with at least 200,000 tonnes capacity. The country's total storage capacity is around 450,000 tonnes.

Jordan took a decision to build stock levels in November after record world grain prices hit the country's budget deficit and prompted ways to offset the financial impact.

There were concerns at the time that grain prices could go up even further and the country could end up footing a higher import bill. They then issued more tenders to build up stocks.

Senior Jordanian officials were recently considering hedge funds to buy wheat on futures markets, despite the risks, to help cushion the financial impact of the unprecedented rise in global food prices.

Jordan's purchases of US wheat have dwindled since last year with Russia, Ukraine, Kazakhstan and Syria emerging as the main suppliers with the most competitive prices, officials say. Shipments from Syria's state grain agency in a bilateral deal have almost been scrapped after a weaker than expected harvest in 2007, officials say. - Reuters