* Syria seeking wheat after worst harvest in 27 years
* Damascus subsidises bread for areas it controls
* Russia says will provide only 100,000 tonnes as aid
(Adds quotes, details, background)
By Maha El Dahan and Olga Popova
ABU DHABI/MOSCOW, Oct 5 Syria is looking to
finance a 1 million tonne wheat purchase from political ally
Russia in an attempt to fill its supply gap after war and poor
rainfall nearly halved its local crop.
The government of President Bashar al-Assad was forced to
tender this summer for an unprecedented 1.35 million tonnes of
imported wheat from Russia to ensure supply of the flat loaves
that are a staple for the Syrian people.
Syria's state grain agency, the General Authority for Cereal
Processing and Trade (Hoboob), has received "suitable prices"
for the Russian wheat tender but several financing scenarios are
still being considered, a government source said on Wednesday.
"We have received 16 offers and have presented several
scenarios for funding and we are awaiting the approval of one of
them in order to proceed," the Syrian government source said.
The financing of the deal could be through immediate payment
or through various credit facility options, he said without
It was not clear when a final decision would be made.
In Moscow, a source in Russia's Agriculture Ministry said
his government would only provide 100,000 tonnes of wheat as
humanitarian aid but the rest would have to be paid for.
Before its civil war erupted in 2011, Syria had been a wheat
exporter, producing four million tonnes in a good year and able
to export 1.5 million tonnes. Now the whole industry, including
wheat farms, seed distribution, milling and bakeries have all
been greatly affected by the conflict.
Syria's wheat harvest nearly halved to 1.3 million tonnes
this year, the lowest in 27 years, as fighting and poor rainfall
further degraded the farming sector and the nation's ability to
Hoboob was only able to procure slightly more than 400,000
tonnes of the total amount of Syrian wheat, creating a large
import need for Assad's government. Perilous transport routes
have meant the Syrian state has struggled to buy from
traditional "bread-basket" areas outside government control.
The Damascus government subsidises bread for the areas it
controls and aid agencies offer supported prices in some areas,
but Syrians in other parts of the country suffer bread shortages
and high prices.
The Russian Agriculture Ministry source said the 100,000
tonnes provided as aid may include grade 5 wheat, with a protein
content of less than 12.5 percent but any further amounts would
have to be paid for in commercial deals.
"We are ready to supply even more from Siberia but if they
pay. The 100,000 tonnes is humanitarian aid to be paid by us
(Russia)," the source added.
The Russian Agriculture Ministry declined to comment on the
issue when contacted by Reuters.
Two Russian agriculture sources said Syria might only be
able to pay for a total of 250,000 tonnes of wheat and not the
whole quantity of one million tonnes for which Hoboob is
Syria has previously tapped frozen funds in foreign bank
accounts to step up purchases of food stocks including wheat. It
has also relied on Iranian credit lines.
Syria's economy has been hurt by a depletion of foreign
reserves that were estimated at around $16-18 billion before the
The Syrian war has killed more than 250,000 people, created
the world's worst refugee crisis, allowed for the rise of the
Islamic State group and drawn in regional and major powers.
(Reporting by Maha El Dahan in Abu Dhabi, Olga Popova and
Polina Devitt in Moscow; Editing by Adrian Croft and Gareth