Yemen's food crisis is deepening, in part because of increasing difficulties obtaining letters of credit (L/Cs).

Banks have also cut credit lines for Yemen's food traders while the country's once thriving ports have turned into battlegrounds.

Obstacles

Lenders are increasingly unwilling to offer L/Cs, while international banks no longer feel comfortable processing payments and are not willing to take the risk according to a well-sourced report by Reuters.

"What this means is traders are saddled with even more risks and have to effectively guarantee entire cargoes, usually millions of dollars, before the prospect of getting paid," one international commodities trading source active in Yemen told the news agency.

"There are just more and more obstacles now to bringing goods into Yemen," he added.

International isolation

An official of the state-run National Bank of Yemen meanwhile has reportedly said it stopped opening L/Cs at the end of last year.

"Outside banks have stopped dealing with us," according to the official, Aidros Mohammed.

This article represents the views of the author and not necessarily those of the ICC or any of the other partners in DC-PRO.