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Drop in grain prices encourages ministry to order additional supplies

By Bahaa Al Deen Al Nawas - Oct 04,2015 - Last updated at Oct 04,2015

AMMAN — Minister of Industry, Trade and Supply Maha Ali said on Saturday that when there is a significant drop in grain prices on the global market, the ministry makes forward purchases to import wheat and barley. 

In remarks to The Jordan Times, Ali noted that the ministry is in charge of strategic reserves, adding that in addition to covering six months-worth of wheat stocks, the ministry prepares shipments to cover two additional months of supply. 

As current policy indicates that barley reserves should be sufficient to cover the Kingdom’s needs for four months, forward purchases for two additional months are also made.

Ali said that the forward purchases “ensure their [wheat and barley’s] availability to be distributed at subsidised prices in the domestic market”, adding that the ministry floats tenders to buy 150,000 tonnes of wheat and barley on a monthly basis. 

The minister said that the agency bought 100,000 tonnes of wheat on September 5 and plans to float tenders next week to buy 100,000 tonnes each of both wheat and barley. 

According to the Food and Agriculture Organisation of the United Nations (FAO), export prices of wheat declined significantly in August with the benchmark US wheat price averaging $216 per tonne, 9 per cent lower than in July. 

The FAO attributed the decline in international quotations to abundant supplies, supported by further upward revisions of production forecasts as northern hemisphere harvests come to a close and shrinking import demand. 

The organisation said export prices of wheat remained around 20 per cent lower than in August last year.

Ali indicated that the authorities recently reviewed articles of tender invitations related to imports of wheat and barley in order to encourage more suppliers to apply and increase competition, adding that the review aims at protecting the rights of the ministry and suppliers in case shipments are rejected by oversight agencies. 

Annual consumption of wheat went up from 750,000 tonnes prior to the Syrian crisis, which erupted in 2011, to over one million tonnes over the past four years, according to previous remarks by the ministry’s spokesperson, Yanal Barmawi. 

Last year, Jordan imported over 1 million tonnes of wheat at a cost of more than $294 million, and bought 750,000 tonnes of barley at a cost of around $193 million, according to Barmawi.


Official figures estimate that over 1.4 million Syrians reside in the Kingdom.

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