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Cablegate: Unable to Obtain Its Wheat Needs From Syria, Jordan

VZCZCXRO2095
RR RUEHDE
DE RUEHAM #3755 2521450
ZNR UUUUU ZZH
R 091450Z SEP 07
FM AMEMBASSY AMMAN
TO RUEHRC/USDA FAS WASHDC
INFO RUEHC/SECSTATE WASHDC 0271
RUEHEG/AMEMBASSY CAIRO 3360
RUEHTA/AMEMBASSY ASTANA 0001
RUEHDM/AMEMBASSY DAMASCUS 3696
RUEHDE/AMCONSUL DUBAI 0372

UNCLAS AMMAN 003755

SIPDIS

SENSITIVE
SIPDIS

FAS FOR OFFICE OF GLOBAL ANALYSIS
FAS FOR OFFICE OF TRADE PROGRAMS
CAIRO FOR AGMINCOUN PKURZ
DAMASCUS FOR AGRICULTURAL SPECIALIST JDALATI

E.O. 12958: N/A
TAGS: EAGR ETRD PREL JO SY
SUBJECT: UNABLE TO OBTAIN ITS WHEAT NEEDS FROM SYRIA, JORDAN
CONSIDERS PURCHASES FROM KAZAKHSTAN

REF: AMMAN 231

Sensitive but unclassified. Not for internet distribution.

1. (SBU) The Government of Jordan, represented by the Ministry of
Industry and Trade (MOIT), signed an agreement with the Syrian
government on September 5 to purchase 50,000 tons of Syrian wheat.
This purchase is part of an ambitious January 2007 agreement between
the two countries for GOJ purchase of 500,000 tons of Syrian wheat.
To date, however, only 250,000 tons of wheat have arrived in Jordan,
a result of a poor growing season which forced the Syrian government
to cancel many wheat trade commitments with numerous buyers. This
shipment is expected to be the last purchase of this season, and
appears to have been driven by strong Syrian political will to
maintain cooperative relations with Jordan.

2. (U) Jordan is now looking to other wheat sources and examining
its purchase options. One potential source is Kazakhstan, with
which the GOJ recently signed a memorandum of understanding for
wheat purchases. The agreement, signed during King Abdullah's
recent trip, accords preferential treatment to the GOJ, including
direct purchases from producers and the ability to contract local
and international shippers to transport the wheat to Jordan. This
arrangement should eliminate the middle-man and cut wheat costs for
the JOJ by USD 50/ton. Jordan's second option is to purchase
American wheat under the GSM-102 program, although this credit
guarantee program would further increase the cost of already
expensive wheat, an expense the GOJ may be willing to bear in
exchange for a reliable supply of high quality wheat.

Visit Amman's Classified Web Site at
http://www.state.sgov.gov/p/nea/amman

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