* Syria's Hoboob paying for imported wheat in Syrian pounds
* Hoboob sought 200,000 tonnes for arrival June 15 to Aug. 15
* Hoboob says new payment terms save $1 per tonne
DUBAI, July 16 - Syria's state grain agency Hoboob is now paying for its wheat imports in Syrian pounds and will no longer open letters of credit for purchased shipments, state news agency Sana reported.
Hoboob said the move was intended to save foreign currency as letters of credit, a form of payment guarantee, cost $1 per tonne of imported wheat. Hoboob is instead paying for wheat it imports one day after arrival at ports in Syrian pounds, Sana said in a report on Saturday.
President Bashar al-Assad is under pressure to ensure supplies of strategic commodities such as wheat keep flowing to supporters in areas under his control and avoid the risk of unrest.
His government needs up to 1.5 million tonnes of wheat annually to feed people in those areas. Hoboob has been struggling to strike successful import deals because of a falling local wheat harvest.
Wheat and other foods are excluded from Western trade sanctions imposed on Syria due to the longstanding civil war but dealers have said difficulties in financing grain sales because of banking sanctions have deterred international trading firms from participating in Syrian tenders.
In October, Hoboob struck a deal to buy 1 million tonnes of wheat from a little known Russian firm to supply government-held areas and prevent bread shortages.
No wheat from that deal has arrived yet and traders have said the deal is in jeopardy.
In February, Hoboob contracted for another one million tonnes of Russian wheat outside of the tender process from local firms.
Syria's agriculture ministry has said local wheat production would be 2 million tonnes for the 2017 season but sources have told Reuters that figure is grossly inflated.
The country's wheat harvest nearly halved to 1.3 million tonnes in 2016, the lowest level in 27 years, as fighting and poor rainfall had a further impact on the farming sector.
Hoboob also said on Saturday it had been seeking 200,000 tonnes of wheat on those terms for arrival between June 15 and Aug. 15. Hoboob said it had asked for that quantity in a tender announced on May 11 under the new terms.
Source: Timesofindia.indiatimes.com
