Yemen traders halt new wheat imports

LONDON/ABU DHABI: Yemen’s biggest traders have stopped new wheat imports due to a crisis at the central bank, another blow to the war-torn country where millions are suffering acute malnutrition.
Nearly two years of war has left more than half of Yemen’s 28 million people “food insecure”, with 7 million of them enduring hunger, according to the United Nations. At the same time, aid agencies are warning that Yemen is on the verge of famine, although they have yet to declare one.
Trade and aid sources say the situation was compounded in September when Yemen’s exiled president, Abd Rabbuh Mansur Hadi, ordered the central bank’s headquarters moved from the capital Sanaa to the southern port of Aden, the seat of the new government.
This has led in effect to a de facto partition, with rival institutions in the north and south.
Hadi’s government said some $4 billion had been squandered on the war effort from central bank reserves; the authorities in Sanaa said the funds financed imports of food and medicine.
In a November 30 letter addressed to Yemen’s trade ministry in Saana, which the company had dealt with before Hadi’s decree to move, leading trader Fahem Group, said: “We would like to inform you that we have been unable to conduct any new contracts for wheat as local banks cannot transfer dollars for the value of any wheat cargoes.”
Fahem Group said in the letter that it wanted to continue importing wheat to cover the population’s needs but was unable to open letters of credit.
Bread forms a major part of people’s diet in Yemen.
Even before the move, the central bank, aiming to shore up dwindling foreign currency, had stopped providing guarantees for importers, leaving them to finance shipments themselves.
Fahem Group imported an estimated 1.2 million tonnes of wheat into the Red Sea port of Saleef between April 2015 and April 2016, which accounted for between 30 to 40 per cent of Yemen’s total wheat imports, according to trade estimates. A separate letter, also addressed to the authorities in Sanaa by major importer Hayel Saeed Group and other large traders, said those firms had stopped new wheat shipments and urged resolution of the financing problems.
Together, those groups accounted for almost all the rest of the wheat imports. A source with the central bank in the capital Sanaa said it had no access to foreign reserves at all. — Reuters