Syria struggles to seal deal to sell wheat to Iraq
Abu Dhabi, July 14, 2014
Private Iraqi grain traders have not been able get trucks across the Syrian border to complete a deal, first agreed in June, to buy 200,000 tonnes of wheat from Syria's state grain body due to conflict raging in both countries.
Syria's General Establishment for Cereal Processing and Trade (Hoboob) said on Monday the 200,000 tonnes of wheat it sold to Iraq was stuck in silos in the northeastern city of Hassaka because the crisis in Iraq had halted efforts to get trucks moving.
Islamic State fighters seized large swathes of Iraq in an offensive last month.
The Sunni Islamist group holds the Syrian city of Raqqa, to the southwest of Hassaka, and this month declared a mediaeval-style caliphate on the land it controls in Syria and now in northern and western Iraq.
Hassaka is just 50 km (31 miles) from the border with Iraq's northwest Nineveh Province, was overrun by the Islamic State last month.
"Right after we finalised the deal, all the problems in Iraq started happening so the wheat until today can't be transported," a Hoboob source told Reuters.
"We are giving the traders an extra 30 days to execute the deal," the source said.
Hoboob had said it sold 100,000 tonnes of soft wheat and 100,000 tonnes of durum wheat to Iraqi private traders from its 2013 crop in June.
The wheat was sold at 206 euros a tonne, on a free-on-truck basis. The grain was in the Hassaka region of Syria.
Iraq's trade minister told Reuters on June 10, just before the current crisis escalated, the country did not import wheat from neighbouring Syria as the produce was not high enough quality, describing sales efforts by Damascus as a political move to "make some problems" for Baghdad.
Hoboob said however the wheat was not sold to the Iraqi government, but to private grain traders.
Still, some trade sources tracking the cargoes questioned the feasibility of the deal.
"Given this is a region close to the border with Iraq, it would make sense to truck any supplies across. But with militia groups active across the whole area, they will not be able to pull it off. I am not convinced this can be completed at the moment especially in large quantities," one Middle East-based commodities trade source said.
A European trade source also had doubts.
"Unless, it is being routed through the Kurdish region I cannot see how this is doable," he said.
The move by Syria to sell some of its wheat was surprising as experts predict a fall in the war-ravaged country's 2014 wheat crop to around a third of pre-war levels.
Still, traders said it may be easier for Syria to sell its old crop from Hassaka to Iraq rather than transport it back to Damascus across various rebel-held areas.
The Hoboob source also said the agency had bought around 500,000 tonnes of local wheat and 120,000 tonnes of barley so far this season.
"We plan to continue to buy the local crop until the end of August as some of the southern areas have a late harvest," the source said.
Agricultural experts, traders and Syrian farmers who talked to Reuters in April gave crop estimates between one million to 1.7 million tonnes. - Reuters