VZCZCXYZ0004
RR RUEHWEB

DE RUEHAM #3083 2001347
ZNR UUUUU ZZH
R 191347Z JUL 07
FM AMEMBASSY AMMAN
TO RUEHC/SECSTATE WASHDC 9580
INFO RUEHRC/USDA FAS WASHDC
RUEHEG/AMEMBASSY CAIRO 3281
RUEHTU/AMEMBASSY TUNIS 0993
RUEHDM/AMEMBASSY DAMASCUS 3648

UNCLAS AMMAN 003083 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
STATE FOR NEA/ELA 
FAS FOR GRAIN & FEED DIVISION 
CAIRO FOR FAS AGMINCOUNS PKURZ 
DAMASCUS FOR AGR DALATI 
 
E.O. 12958: N/A 
TAGS: EAGR EAID JO
SUBJECT: JORDAN PREFERS BUT CANNOT AFFORD U.S. WHEAT 
 
REFS: A) STATE 29586; B) 06 AMMAN 7278 
 
¶1.  (U) Secretary General of the Ministry of Industry and Trade 
(MOIT) Montaser Oklah reiterated Jordanian interest in purchasing 
U.S. wheat during a July 9 meeting with Econoffs and Shannon 
Schlect, the U.S. Wheat Association's Assistant Regional Director 
for the Middle East/East Africa.  Schlect informed MOIT that wheat 
yield production in the United States this year is expected to be 
57-58 million metric tons, with approximately 30 million metric tons 
available for export. 
 
¶2.  (SBU) Commenting that the quality of U.S. wheat is the best in 
the world, Oklah lamented that price competitiveness has been 
Jordan's main obstacle to purchasing it.  In particular, he 
estimated an approximate $100/metric ton price differential between 
U.S. and Syrian wheat due to ocean freight shipping costs.  As a 
result, the Government of Jordan (GOJ) entered into an agreement 
with Syria to provide Jordan with 500,000 metric tons in 2007, which 
Oklah said meets about 70 percent of Jordan's wheat demands.  In 
regard to the supply reliability of Syrian wheat, Oklah confirmed 
that a low 2007 yield of approximately 1.5 million metric tons 
caused Syria to cancel contracts with some regional countries 
including Egypt and Tunisia, but said that the GOJ had been savvy 
enough to ensure in its agreement with Syria that Jordan would 
receive first export priority, which helped secure the 500,000 
metric tons. 
 
¶3.  (SBU) Oklah noted that MOIT has been searching for sources to 
purchase wheat equivalent to U.S. hard red winter wheat, but is 
finding that international prices are generally rising due to low 
world stocks.  He said that Jordan previously depended on the PL 480 
program for buying wheat from the United States, and would like to 
see the program or similar assistance resumed (Ref B).  He commented 
that such programs are the most effective public diplomacy tools for 
winning hearts and minds in the Middle East. 
 
¶4.  (SBU) Comment:  The GOJ has controlled the wheat trade as a way 
to ensure food security.  Rising international wheat prices have put 
the GOJ in the difficult position of having to bear additional 
budgetary costs as it maintains current wheat subsidies, and find 
high quality wheat and wheat flour at competitive prices to meet the 
growing demands of private industry in Jordan.  End Comment. 
 
Visit Amman's Classified Website at 
http://www.state.sgov.gov/p/nea/amman 
 
HALE