Syria resumes rice purchases after price falls

The Syrian government expects to import 100,000 to 115,000 tonnes of rice this year as it resumes subsidies disrupted by market volatility and high prices, the head of the state's purchasing division said on Wednesday.

The government last week concluded a deal to buy 12,500 tonnes of white Egyptian rice at 555 euro ($744) a tonne on top of 62,200 tonnes bought from Thailand, Marwan al-Fawaz, head of the General Foreign Trade Organisation, said.

"The rice crisis last year didn't just impact Syria. International prices were too expensive," said Fawaz, adding that the government did not buy any rice in 2009.

Most rice imports in Syria are purchased by the private sector, but the state usually imports volumes to supply its own stores, distribute ration cards and maintain an undisclosed strategic reserve which Fawaz said has remained healthy.

The government took delivery of a 26,200 tonne cargo of Thai rice a month ago and a ship carrying another 25,000 tonnes was due within a week, Fawaz said.

The Egyptian cargo is expected to arrive to a Syrian port within a month of opening of the letter of credit, he added.

Asian rice prices have fallen from last year's peak, returning them to levels last seen in 2008.

Egypt has eased restrictions on exporting rice and India, the world's second-biggest producer, could lift a ban on exports of common rice grades that dates back to October 2007.

Syrian regulations stipulate that the government buys only high specification rice, although allowing cargoes with five percent breakage instead of three percent could save the Syrian treasury millions of dollars, Fawaz said.

"There is an old policy in place to import only the top quality," he said.

The GFTO is in charge of procurement of imports on behalf of the government. It also owns real estate and a number of duty free shops, but business mostly goes to a privately owned duty free chain with larger and more varied stock.

Fawaz has streamlined the GFTO since he took over five years ago and says the organization plans to invite private companies to manage the duty free shops.

"Competition will be good," he said. We plan to modernise the shops and invite specialist foreign companies."

The role of the GFTO has lessened after President Bashar al-Assad, who succeeded his late father in 2000, removed several restrictions on trade and bans on private enterprise.

But the government, which has been controlled by the Baath Party since it took power in a 1963 coup, remains a dominant player in the economy.

Syria has been under U.S. sanctions since 2004 for its support of militant groups, despite better relations with Washington since President Barack Obama came to power 15 months ago.