Albania hosts MWL chief for Eid sermon at largest mosque in the Balkans    Saudi Arabia launches pavilion at Bologna International Book Fair 2025    Rare Kaaba interior coverings showcased at Islamic Arts Biennale in Jeddah    Haramain High-Speed Railway transports over 1.2 million passengers during Ramadan    Marine Le Pen sentenced to prison, barred from office over EU funds embezzlement    UK returns over 24,000 migrants as Starmer scraps Rwanda deportation plan    Missing US soldiers' armored vehicle recovered from Lithuanian swamp    Myanmar declares seven days of national mourning after devastating earthquake    Saudi Transport Authority says passengers can ride for free if taxi meters are off    Ministry of Education forms 425 community partnerships with SR653 million impact    Defense, interior, and national guard ministers extend Eid greetings, praise efforts of military and security personnel    Mexico bans junk food in schools to fight childhood obesity epidemic    Elon Musk's xAI acquires X in all-stock deal    Sweet sales surge ahead of Eid as Saudi chocolate imports top 123 million kg in 2024    Saudi creatives shine at Jeddah's Fawanees Nights with art, fashion, and storytelling    100 Thieves claim Marvel Rivals Invitational NA crown as 2025 scene heats up    T1 CEO confirms Gumayusi's return for LCK Spring after lineup shakeup    Bollywood actress vindicated over boyfriend's death after media hounding    Saudi Arabia hold Japan to goalless draw in Saitama to stay in World Cup hunt    NewJeans announces hiatus after setback in court battle    George Foreman, heavyweight champion and cultural icon, dies at 76    Grand Mufti rules against posting prayers and preaching in mosques on social media    King Salman prays for peace and stability for Palestinians in Ramadan message King reaffirms Saudi Arabia's commitment to serving the Two Holy Mosques and pilgrims    Bollywood star Saif Ali Khan 'out of danger' after attack at home in Mumbai    Exotic Taif Roses Simulation Performed at Taif Rose Festival    Asian shares mixed Tuesday    Weather Forecast for Tuesday    Saudi Tourism Authority Participates in Arabian Travel Market Exhibition in Dubai    Minister of Industry Announces 50 Investment Opportunities Worth over SAR 96 Billion in Machinery, Equipment Sector    HRH Crown Prince Offers Condolences to Crown Prince of Kuwait on Death of Sheikh Fawaz Salman Abdullah Al-Ali Al-Malek Al-Sabah    HRH Crown Prince Congratulates Santiago Peña on Winning Presidential Election in Paraguay    SDAIA Launches 1st Phase of 'Elevate Program' to Train 1,000 Women on Data, AI    41 Saudi Citizens and 171 Others from Brotherly and Friendly Countries Arrive in Saudi Arabia from Sudan    Saudi Arabia Hosts 1st Meeting of Arab Authorities Controlling Medicines    General Directorate of Narcotics Control Foils Attempt to Smuggle over 5 Million Amphetamine Pills    NAVI Javelins Crowned as Champions of Women's Counter-Strike: Global Offensive (CS:GO) Competitions    Saudi Karate Team Wins Four Medals in World Youth League Championship    Third Edition of FIFA Forward Program Kicks off in Riyadh    Evacuated from Sudan, 187 Nationals from Several Countries Arrive in Jeddah    SPA Documents Thajjud Prayer at Prophet's Mosque in Madinah    SFDA Recommends to Test Blood Sugar at Home Two or Three Hours after Meals    SFDA Offers Various Recommendations for Safe Food Frying    SFDA Provides Five Tips for Using Home Blood Pressure Monitor    SFDA: Instant Soup Contains Large Amounts of Salt    Mawani: New shipping service to connect Jubail Commercial Port to 11 global ports    Custodian of the Two Holy Mosques Delivers Speech to Pilgrims, Citizens, Residents and Muslims around the World    Sheikh Al-Issa in Arafah's Sermon: Allaah Blessed You by Making It Easy for You to Carry out This Obligation. Thus, Ensure Following the Guidance of Your Prophet    Custodian of the Two Holy Mosques addresses citizens and all Muslims on the occasion of the Holy month of Ramadan    







Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.



Yemen's food crisis deepens as banks cut credit for shipments
Published in The Saudi Gazette on 06 - 03 - 2016

Banks have cut credit lines for traders shipping food to war-torn Yemen, where ports have been battlegrounds and the financial system is grinding to a halt, choking vital supplies to an impoverished country that could face famine.
Lenders are increasingly unwilling to offer letters of credit — which guarantee that a buyer's payment to a seller will be received on time — for cargoes to a country plagued by a civil war between the government and Houthi militia as well as an Al-Qaeda insurgency, say banking and trading sources.
"Western international banks no longer feel comfortable processing payments and are not willing to take the risk," said an international commodities trading source active in Yemen.
"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," said the source, who declined to be named. "There are just more and more obstacles now to bringing goods into Yemen."
Traders that procure food for Yemen are mostly smaller, private firms based locally or regionally that buy the goods from international markets.
The situation has worsened rapidly in the past month after Yemen's central bank stopped providing favorable exchange rates for local traders buying rice and sugar from global markets, say the sources, further hindering trading of food, which accounts for a large proportion of the country's imports.
The decision to limit such rates to wheat and medicine — deemed more nationally crucial — was a bid to preserve fast-dwindling foreign currency reserves.
The financing difficulties have been one of the factors behind falling shipments to Yemen, according to the sources. In January, around 77 ships berthed at ports in Yemen, according to UN data, down from around 100 ships in March last year — when the war escalated — and a far cry from the hundreds of ships that called every month in previous years.
The consequences could be grave for the Arab peninsula's poorest country, which the United Nations says is "on the brink of catastrophe."
It relies on seaborne imports for almost all its food and 21 million out of 26 million people are in need of humanitarian support, with over half the population suffering from malnutrition.
The war has seen a Saudi-led Arab coalition intervene in late March a year ago to seek to restore the internationally recognized government of President Abdrabbu Mansour Hadi, battling the Iranian-allied Houthis and forces loyal to ousted president Ali Abdullah Saleh.
Mohammed AlShamery, an official at Yemen's sole sugar refinery, in the northern city of Hodaida on the Red Sea, said the credit and currency curbs had added to the problems of bringing cargoes into the country.
A European banking source said some banks had decided to completely withdraw from offering credit lines on food trades to Yemen.
"Even if a bank is willing to process a payment, which relates to food, they have to be careful," the source added.
Trading sources said banks that had been involved in Yemen's food trade have included Commerzbank, Deutsche Bank and HSBC as well as regional Middle East banks.
Commerzbank and Deutsche Bank declined to comment. HSBC said it continued to support customers trading across the Middle East and North Africa region including Yemen "subject to relevant regulatory and commercial controls."
Yemeni banks are also feeling the pressure. Aidros Mohammed, an official with state-run National Bank of Yemen, said since the end of last year it had stopped opening letters of credit for the trade of goods in general "as outside banks have stopped dealing with us."
Watheq Ali Hamed, the manager of a store in Sanaa, said the decision by the central bank regarding rice and sugar purchases would be felt by ordinary Yemenis.
"Prices are already going up because of the war and the rise in the cost of securing the goods," he said. "The full effects of that decision will be felt going forward. Luckily, we still have some stocks."
Slowing of imports and rising prices could pose grave problems for Yemen, where areas are at risk of famine.
The country lacks sufficient seasonal rains, has limited access to farming areas and facing rising costs of agricultural supplies, a report by a UN food agency said in January.
Major ports have been flashpoints for fighting including the southern gateway of Aden.
Adding to the turmoil, Al-Qaeda in the Arabian Peninsula (AQAP) has been expanding its presence in Yemen; in February it took control of the southern town of Ahwar, months after seizing the major port city of Mukalla to the east.
Two banking sources in Yemen said restrictions on moving money abroad due to the conflict was adding to trade financing difficulties. "We have a big problem in transferring money abroad ... so we cannot open letters of credit for traders to import," one Yemeni banker said.
Trading and banking sources also said uncertainty over who was in control of Yemen's central bank — given its headquarters in Sanaa — was adding to lenders' caution. One Middle East banking source said some institutions were steering clear of transactions while Sanaa was still under Houthi control. The central bank could not be reached for comment.
A Feb. 11 report by Yemen's Ministry of Planning and International Cooperation showed total foreign reserves of Yemen's central bank had slid to $2.1 billion by the end of 2015, from $4.7 billion at the same point in 2014.
The report said a "deterioration of the national currency value and scarcity of foreign exchange" were making it difficult to finance imports.


Clic here to read the story from its source.