* Payment to be made in euros, delivery on trucks
* Trader says sale may not happen as Syria faces poor crop (Adds quotes from traders, context)
BEIRUT, May 22 (Reuters) - Syria’s state cereal body launched a tender for a second time this month to sell wheat to neighbouring Iraq, as a trader said shipping across the border may be easier than trying to move wheat to Syrian areas suffering shortages.
The Syrian General Establishment for Cereal Processing and Trade asked for bids on Thursday for 100,000 tonnes of soft wheat and 100,000 tonnes of durum wheat. It had made no sale in the first tender, which closed on May 7, according to traders.
War and drought have cut Syria’s wheat forecast to between 1 million and 1.7 million tonnes, agricultural experts and traders say. Before the conflict, it typically produced around 3.5 million tonnes a year.
“It is unclear the exact reason behind the sale tender in light of the wheat shortage, but the most obvious logistical reason is that it is not easy at all for the government to transport the wheat from places like Hassaka and Deir al Zor back to Damascus, so this is a way of utilising it,” a Damascus grain trader said.
Syrian Prime Minister Wael Halki said on Sunday that the transport of a tonne of wheat from Hassaka to Damascus costs 25,000 lira ($147). The road passes through several conflict areas.
The second tender will close on June 4, the agency said. The document asked for bids to be submitted in euros on a free-on-trucks basis and said the wheat would be transported from warehouses in Hassaka, in northeastern Syria.
A European trader said he did not think the sale would take place, because Syria is facing a poor crop this year.
“Serious drought has cut Syria’s crop and is also thought to have damaged harvests in neighbouring Turkey and Lebanon, which have also been issuing large wheat import tenders.”
Dry weather is likely to cut Syria’s 2014 wheat crop by 18 percent on the year to about 1.97 million tonnes, the U.N. Food and Agriculture Organisation said in a report on May 15.
Another trader said Syria would have to import the same amount of wheat if it sells supplies to Iraq: “It may be the Syrians want to send a signal to the market with a sale tender that they have large old-crop stocks.”
Nearly a third of Syrians have either been displaced from their homes or fled the country, and swathes of territory are in the hands of rebels fighting to overthrow President Bashar al-Assad. (Reporting by Oliver Holmes in Beirut, Michael Hogan in Hamburg and Maha El Dahan in Abu Dhabi; editing by Jane Baird)