In this article, we do not claim to unveil the enigmatic mysteries surrounding the wheat trade in regions under Syrian regime control. Instead, our objective is to shed light on these mysteries, which stem from a combination of governmental chaos, lack of strategic planning, absence of a clear vision for the future, and most notably, the prioritization of the interests of a select few over those of the majority.
The First Secret: The Price of Russian Wheat
Approximately ten days ago, the Syrian Minister of Agriculture, through Russia’s “Novosti” agency, announced the import of 1.4 million tons of Russian wheat for the Syrian Grain Corporation. Notably, the contract’s value remained undisclosed, a common practice by the regime. This opacity fuels debates on the fairness of the locally set wheat purchase price, an annual announcement by the government.
Just as in the previous two seasons, criticism erupted following this season’s announcement of a benchmark price of 4,200 Syrian pounds per kilogram of wheat. Farmer union representatives once again contended that this pricing failed to cover their costs. Local experts have repeatedly warned that such government-set prices compel farmers to abandon wheat cultivation in favor of more economically viable crops. This represents a significant strategic loss for the Syrian economy, leaving “political decisions” vulnerable to the exporting country, which in this case, is Russia.
This brings us to the second secret: Why does the regime consistently impose unsatisfactory prices for locally-produced wheat, despite reassurances from the Minister of Agriculture that the current season’s price is under review? Past experiences lead us to doubt that the expected price increase will meet the farmers’ expectations. Last season, despite raising the purchase price from 2,300 to 2,800 Syrian pounds per kilogram under criticism, farmers still claimed costs exceeding 2,860 Syrian pounds per kilogram. Predictions from experts in loyalist media outlets came true as the majority of local wheat eluded the Syrian Grain Corporation’s control due to unfair pricing.
The regime fell short of its goal of procuring one million tons of wheat from the local market, securing only 725 thousand tons, despite a nationwide production of approximately one and a half million tons. Meanwhile, the annual demand for regime-controlled areas stands at 2.4 million tons, leading to hefty imports from Russia, straining the state treasury and draining precious foreign exchange reserves. This leaves us with the same baffling question: Why does the regime consistently set prices for local wheat that leave Syrian farmers dissatisfied?
The typical response from regime officials is that pricing is based on a careful analysis of production costs. However, the Farmers’ Union, as well as local experts in regime-controlled areas, argue that the official price falls far short of the global market price. Yet, upon closer examination, we find that these experts rely on futures contract prices (for delivery at the end of March), whereas the recent prices of Russian wheat during the past week hovered around $250 per ton (inclusive of shipping fees averaging $15 per ton). This equates to 3,500 Syrian pounds per kilogram of wheat, making the official pricing appear equitable in comparison to international rates. Farmer representatives dispute this, citing higher local production costs exacerbated by the government’s reduced support for the agricultural sector. Farmers are compelled to purchase fuel, pesticides, and fertilizers at nearly double the global market rates from the Syrian black market.
This brings us to the third secret, concerning those who benefit from this situation. The fortunate minority of merchants holding contracts for importing Russian wheat, along with fuel, pesticides, and fertilizers, are believed to have affiliations with influential figures within the regime. For instance, if we consider the import of 1.4 million tons of Russian wheat at an estimated average price of $250 per ton, the contract’s total value stands at a staggering $350 million USD. This is a substantial figure when compared to Syria’s initial budget for 2024, which amounts to approximately $2.5 billion (according to black market exchange rates). This reinforces the notion that key decision-makers within the regime prioritize the interests of this privileged merchant minority over local wheat cultivation. Furthermore, Russia, as an ally of the regime, stands to gain from this situation, strengthening the bond between the two.
Now, we delve into the fourth secret: Who ultimately decides the fate of wheat in Syria? The same Minister of Agriculture who announced the import of 1.4 million tons of Russian wheat ten days ago had previously declared, in June, that Syria would import only half the quantity of wheat compared to the previous year, due to expectations of a robust local harvest. However, the outcome saw Syria importing approximately the same amount as before, indicating that the Minister of Agriculture may lack precise data regarding wheat production, imports, and consumption. Alternatively, the decision-making power concerning the wheat situation may not reside within his jurisdiction.
The result of this ongoing mystery is the gradual decline of Syria’s wheat production and the shrinking of its cultivation areas, year after year.
This article was translated and edited by The Syrian Observer. The Syrian Observer has not verified the content of this story. Responsibility for the information and views set out in this article lies entirely with the author.