Wheat consumption in Jordan levels off as refugee influx ends

by Eric Schroeder
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Jordan has begun to increase its storage space for wheat, a strategy that is expected to allow the government to purchase larger-than-normal stocks of wheat.
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WASHINGTON, D.C., U.S. — Wheat consumption in Jordan is forecast to remain virtually unchanged in the 2017-18 marketing year, according to a report from the Foreign Agricultural Service (FAS) of the U.S. Department of Agriculture (USDA).

At 1.32 million tonnes, the forecast for 2017-18 was up only marginally from 1.318 million tonnes during the 2016-17 marketing year. The flat forecast is in stark contrast to previous years, when Jordan experienced unprecedented growth in consumption due to the influx of Syrian refugees and a testing economic environment.

“Although the challenging economic environment endures, the refugee influx has ended, furthermore some refugees have begun to return on their own to Syria,” the USDA noted in the report.

Production of wheat is negligible in Jordan, with the country only turning out about 25,000 tonnes per year, a figure that is expected to remain unchanged in 2017-18.

Wheat imports also are forecast flat, at 1.3 million tonnes, the USDA said. The top wheat origin is expected to remain Romania, followed by Russia and Ukraine. During the 2016-17 marketing year U.S. imports are expected to total about 100,000 tonnes, distributed under the FAS Food for Progress program with the government of Jordan. No imports are expected in the 2017-18 marketing year, though, the USDA said.

Jordan has begun to increase its storage space for wheat, a strategy that is expected to allow the government to purchase larger-than-normal stocks of wheat.

“The government of Jordan finalized its silo expansion project by increasing its storage capacity by an extra 225,000, plus an additional 100,000 that is currently in construction, alleviating the tight storage capacity that affects all commodities, and ensuring food security,” the USDA said. “The new port in Aqaba, where the new silos are located, received the first Panamax wheat vessel carrying 48,000 tonnes of Romanian wheat during the first week of March 2017.”

The Ministry of Industry and Trade (MIT) is the sole wheat importer in Jordan. The agency sells its wheat to mills at the government’s set price, which the FAS said is based on a moving average of the inventoried wheat’s cost, including purchasing, storage and transportation costs. The mills then sell the wheat to bakers under MIT’s supervision.

Flour in Jordan is sold to bakers at one of two prices: all-purpose flour is sold at a market price (which is the markup cost on milling fees from the wheat sold by the government — ranging from $250 to $350 per tonne), or a subsidized price that goes as low as $50 per tonne.

“MIT subtracts the cost of subsidy from the subsidized flour upon invoicing the mills,” the FAS noted. “The difference between the two prices accounts for at least $100 million in losses due to the program’s mismanagement and abuse, a well-known issue acknowledged by many stakeholders. Subsidized flour accounts for up to 90% of the total consumption.”