Syrian Conflict Sends Food Costs Skyrocketing for Iraqi Consumers

Article Summary
Commodity prices in Iraq are soaring — as much as tenfold — because of the conflict in neighboring Syria, reports Nasir al-Ali. Agriculture, industry and trade are all at a standstill, exacting a toll on Iraq, which has historically been one of Syria’s largest trading partners. Syrian businesses are also running the risk of losing their market share in Iraq.

Current events in Syria have led to a considerable rise in the prices of goods that are exported from the country to the Iraqi market. This puts an additional burden on Iraqi citizens, and may cause Syrian merchants to lose their stake in a primary market. Mohammad al-Saadi, an [Iraqi] fruit and vegetable merchant told Al-Hayat: “The rise in prices has affected goods we used to import from Syria.” He said that [Iraqi] consumers are beginning to sense the impact of the events in Syria, as they have started to affect their daily food supply. According to Saadi, this increase cannot be taken lightly, as the prices of commodities have increased to almost four times more what they were less than a month ago. He noted that the prices of some commodities have risen 10-fold, stressing the difficulty in obtaining these goods from other countries since Iraqi consumers have become accustomed to Syrian goods.

The Syrian economy

A producer of cotton goods inside Syria said the Syrian economy is on the brink of collapse, adding that its three main sectors – agriculture, industry and trade – are at a complete standstill. He said that the agricultural sector has been affected the most, since every season farmers provide for the local market and also export large quantities to the Gulf, Lebanon, Jordan, Turkey and Iraq, which imports the largest share of agricultural products.

The producer added: “The industrial and commercial sectors are completely suspended as well, with the exception of domestic trade, which provides the market with some food products.” He noted some cases of looting of markets in various cities.

For example, a kilogram of onions has reached 2,500 Iraqi dinars (more than $2), while a kilogram of bananas now costs 750 dinars [64 cents].

Noura al-Bajari, member of the Parliamentary Economic and Investment Commission, said that “the commission held a meeting last weekend with the director general of customs, Munther Abd-al-Amir, and a number of representatives from the Secretariat of the Council of Ministers.”

She said: “The commission was for postponing the application of the tariff law, which was set for to go into effect at the beginning of July. This is a constitutional violation because the law was passed by parliament and should be applied. Postponing its application must be done through the law.”

She continued: “The government has reasons for the postponement, including the absence of complete control over all border crossings, especially in the Kurdistan region. This issue was discussed with the director general of customs.” She added: “The director general requested a respite of two years until all logistical, technical, administrative and financial preparations are completed. A special system for the detection of goods and documents will be put in place. Additionally, a competent staff, comprising of about 5,000 employees, will be appointed.”

She said that “this issue is up to the committee and parliament to decide upon, and it will be introduced for initial evaluation in one of the [upcoming] parliamentary sessions.”

Dependence on imports

Souhad al-Obeidi, a member of the Services Committee, warned against Iraq’s continued dependence on products imported from neighboring countries. She said: “The fluctuation of prices and crises of this kind will be the dominant features of the Iraqi market, which cannot secure its needs from local products. The market will be strengthened through the application of the tariff law.”

Muzher Salih, deputy governor of the Central Bank of Iraq, told Al-Hayat that the volume of the Iraqi-Syrian trade exchange was excellent during the past three years, and did not fall under $4 billion last year. He said that the continuation of the security crisis in Syria will cause Syrian manufacturers, farmers and merchants to lose their customers in the Iraqi market.

Found in: syrian crisis, syrian, iraq, inflation, food, economic, business

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