In addition to striving to offer competitive prices, the autonomous administration has implemented regulations to prohibit wheat producers from selling their crops to the regime without its authorisation.
Violation of this restriction can result in substantial financial penalties and even imprisonment. Consequently, farmers in north-east Syria must carefully consider the implications of selling their crops to the regime and devise strategies to mitigate any potential consequences, particularly if there is a possibility of earning higher profits from such transactions.
Damascus lowballs Kurds on wheat price
Unlike in previous years, the regime appears to be less inclined to enter a bidding war with its main competitor. The initial purchasing price set for wheat was $255 per ton, which was lower than the rate set in 2022 based on the official exchange rate at that time. Taking into account inflation and increased production costs, the rate becomes even lower.
Responding to widespread criticism of this lowball rate, the government eventually increased the price to $312 per ton. Despite the increase, the rate set by Damascus remains significantly lower than the one set by the autonomous administration, which was initially set at $430 per ton.
In the past, the regime used to acquire around 35 percent of its annual wheat supply from the north-east through local middlemen by being more financially competitive and using middlemen to reduce risks for the farmers. However, this does not seem feasible this year due to the lack of competitive offers and the associated high risk.
To justify this controversial policy, which could have significant implications for food security in regime-held areas, government officials argue that the price is fair. They claim that the government rate not only covers costs but also provides a profit margin for farmers.
However, wheat producers strongly dispute this narrative, asserting that the rate fails to even cover the actual costs of wheat production for this season. The negative reaction of farmers in the north-east to the price set by the autonomous administration, despite it being higher, further underscores just how low the rate offered by the regime is.
Regime has access to cheaper wheat
Some analysts who agree with this assessment attribute the regime's low price to a lack of financial resources. They argue that the substantial financial deficit in the government budget this year has limited the regime's ability to offer a competitive rate.
Others, however, argue that the regime's policy stems from its ability to import wheat from abroad at a lower cost and profit by selling it at a higher price. They highlight that the current international market price for wheat is around $260 per ton, which is lower than the rate currently offered by the regime.
