US sanctions eroding Sudan’s wheat reserves

Sudan’s strategic reserves of wheat are rapidly declining as a result of the refusal of several banks in western countries and Gulf States to open documentary credits for importing the grain. Officials of major Sudanese flour mills repeatedly contacted the Central Bank of Sudan for a whole week, in order to obtain foreign currency needed for wheat imports, amid fears that its operations could stop, Sudan Tribune reported on Monday. Sudan annually imports more than two million tons of wheat at a cost of $1.5 billion. The wheat crisis surfaced five days ago, after Qatari banks which used to cooperate with Sudan, started to face difficulties in opening documentary credits for its Sudanese counterparts. Commercial banks in Sudan have been keeping large numbers of documentary credits for several months, as they could not find a correspondent bank to accept them. FinesIn March, a number of Saudi and European banks stopped dealing with Sudanese banks under pressure from the USA.International financial institutions became increasingly cautious in dealing with Sudan as they do not want to risk being found in violation of US sanctions. Several Sudanese importers have become reluctant to use their accounts with foreign banks, particularly as after the USA began to pursue banks offering such services. Following huge BNP Paribas penalties, the US authorities intensified investigations of other foreign banks over signs of similar infractions. At least six banks in Germany, France, Italy, and Japan could face fines for processing transactions linked to Sudan, Iran, or Cuba. In June, the Sudanese Minister of Finance, Badreldin Mahmoud, urged the Ministry of Foreign Affairs to put efforts to lift economic sanctions imposed on Sudan due to its significant impact on the sudanese economy. He acknowledged to the Sudanese Parliament that the government is finding it increasingly difficult to control the price increases at the markets, linked to a continuous downfall of the exchange rate of the Sudanese Pound against the US Dollar and other major currencies. $745 million per annumThe US sanctions on Sudan cost the country $745 million per annum, the head of the opposition Umma Party, El Sadig El Mahdi said on 7 July at the Global Forum for Moderation in Amman.“The continuation of Al Bashir’s regime in power also prevents Sudan from obtaining relief from its debt burden, estimated at about $44 billion, which is crippling the country economically”, El Mahdi stressed. Without political backing of western countries, it would be nearly impossible for Sudan to convince creditors of cancelling its debts. The USA imposed economic and trade sanctions on Sudan in 1997, in response to its connection to terror networks, and widespread human rights abuses. In 2007, it strengthened the embargo, citing violence against civilians in Darfur, which it labelled as genocide. (Source: Sudan Tribune, ECOS) Related:USA scrutinises German banks over dealing with Sudan (9 July 2014) ‘European banks cautious of US sanctions on Sudan’: banker (14 March 2014) ‘Suspension Arab bank dealings heavy blow to Sudan’: experts (2 March 2014) Saudi, European banks halt Sudanese transactions (27 February 2014)