Syria's state grain agency, Hoboob, is no longer opening letters of credit (L/Cs) for wheat imports according to state news agency Sana.

The move appears not to be connected with longstanding difficulties Syria has had obtaining essential foodstuffs and trade finance during its protracted civil war.

Cash settlement

Hoboob is now paying for its wheat imports in Syrian pounds one day after arrival at ports.

The state grain agency says it has ditched L/Cs because their use adds US$1 to every tonne of imported wheat.

Russian deals

Wheat and other essential foodstuffs are excluded from international sanctions imposed on Syria, but the risk of violating sanctions has deterred international trading firms and banks from participating in Syrian deals.

The country is suffering a severe shortage of wheat, with production reaching a 27-year low in 2016 due to civil unrest and poor rainfall.

Hoboob has reportedly been negotiating with Russian dealers to provide wheat.

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