Syria Today | Syria to barter wheat for oil and phosphate

In an attempt to bypass the sanctions imposed by the EU and meet the country's needs, the Economic Committee of the Syrian cabinet has agreed on a proposal to barter its wheat for oil and phosphate. The decision was announced by Suleiman al-Nasser, the head of the General Establishment of Cereal Processing and Trade ("Hoboob"), on January 18, Syrian private daily Al-Watan reported.

Nasser stated that a Ukrainian public company had obtained approval for the deal from the Syrian government; however, he did not reveal any further details.

Wheat is one of a few crops designated as strategic by the Syrian government. The country consumes around 4.8m tons of wheat a year, according to the Syrian Central Bureau of Statistics (CBS) and this year's crop is supposed to reach 4.5m tons, up from 3m tons last year, according to the government's 2011-2012 Agricultural Plan published last September.

Syria also used to produce 385,000 barrels of oil per day in 2010, 99 percent of which was sent to Europe. Now, however, due to sanctions, Syria is not only unable to export crude oil, but also unable to purchase refined oil. Therefore, having a good crop of wheat, Syria decided to exchange part of it in order to satisfy its need for oil products.

To keep its strategic crop reserves stable, Syria – a producer of 20 kinds of wheat – used to import cheaper, soft milling wheat used in various food industries and export its surplus production of high-quality, more expensive hard durum wheat, which is used less often in food production in Syria.

However, "Hoboob" has rejected all offers and made no purchases in an international tender to buy 100,000 tons of soft milling wheat to boost its reserves. "Prices were too high," Nasser explained, pointing out that wheat of any origin was sought. On December 7, Syria's grains agency purchased 100,000 tons of Black Sea region soft wheat.

"Hoboob", with its monopoly on buying wheat from Syrian farmers, has already bought 2.5m tons of both kinds in 2011. "60 percent of the volume received by the establishment in 2011 was hard wheat, compared with 40 percent in 2010," Nasser told Al-Watan.

Before the 1990s, when persistent droughts, decreasing underground water and wheat rust disease ravaged crops, Syria was a wheat exporter, mainly to Jordan and Egypt. Now it needs to import soft wheat. However, Nasser affirmed that "our wheat reserves cover two years of domestic consumption" and that the upcoming wheat swap is "an important opportunity we must not lose".