Russia, the world’s largest wheat exporter, was a staunch supporter of Bashar al-Assad and supplied wheat to Syria through complex financial and logistical arrangements, circumventing Western sanctions imposed on both Syria and Russia.

A Russian source close to the government told Reuters supplies to Syria have been suspended because exporters are concerned by uncertainty over who will manage wheat imports on the Syrian side following the change of power in Damascus.

“I think no one would dare supply wheat to Syria under the current circumstances,” the source, who spoke on condition of anonymity due to the sensitivity of the situation, told Reuters.

Shipping data shows one vessel, the Mikhail Nenashev, is anchored off the Syrian coast, while another, the Alpha Hermes, is heading towards the Egyptian port of Alexandria after remaining off the Syrian coast for several days.

The Syrian General Establishment for Cereals Processing and Trade (Hoboob) used to conduct wheat purchasing tenders but has increasingly relied on a network of international intermediaries to maintain Russian supplies despite sanctions.

Rebel leader Ahmad al-Sharaa’s Islamist group, which ousted al-Assad in a swift campaign in Damascus last week, is asserting its authority over Syria’s state by deploying police and installing interim officials.

However, they have yet to establish a new administration in Hoboob or create another commodity importing agency, according to Syrian sources, who also spoke on condition of anonymity.

Russian and interim government in contact

A Syrian source told Reuters that vessels were delayed because of uncertainty over payments and that Russia and the interim government were in communication regarding the issue. A Russian industry source said Russian exporters were in contact with the Syrian side.

Russian Deputy Foreign Minister Mikhail Bogdanov said on Friday that Russia has made direct contact with the political committee of Syria’s Islamist rebel group, Hayat Tahrir al-Sham, aiming to maintain its military bases in Syria. He did not comment on the wheat trade.

Given there was no payment from the Syrian side for the delivered wheat, a Russian industry source said the cargo of about 60,000 metric tons loaded on the two vessels might be sold to another buyer.

The two vessels can carry a combined 33,000 tons of wheat. However, part of the Russian grain trade with Syria is conducted using sanctioned Syrian vessels that are not visible on tracking systems.

Eduard Zernin, head of the Russian Grain Producers and Exporters Union, told Reuters this week that Russian grain exporters did not plan to unilaterally stop supplying wheat to Syria.

Zernin estimated Syria’s imports at about 2 million metric tons of wheat per year, and said Syria was not a major consumer. A disruption in Russian wheat supplies, however, could cause hunger in the country of over 23 million people.

Dmitry Rylko from IKAR consultancy estimated wheat exports to Syria at 300,000 tons so far this season, with the country ranking 24th among Russian wheat buyers. Syrian imports vary from year to year depending on its own harvest.

Syria could produce up to 4 million tonnes of wheat in a good year, which would be enough for domestic needs and allows for some exports.

However, war and successive droughts have eroded its crop, forcing the country to rely on imports from the Black Sea region to sustain a bread subsidy program essential for its population.

— Additional reporting by Maha El Dahan in Dubai and Gleb Bryanski in Moscow

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Russia earlier ordered the Azov Sea closed to the movement of commercial vessels until further notice, but kept Russian ports in the Black Sea open for navigation, its officials and five grain industry sources said on Thursday.

Ukraine is a major exporter of corn (maize), much of it destined for China and the European Union. It also competes with Russia to supply wheat to major buyers such as Egypt and Turkey.

Industry estimates currently put Ukraine’s grain exports at about five million to six million tonnes a month, comprising about 4.5 million tonnes are corn, one million tonnes of wheat and a remaining share of mainly barley.

Main grain export ports include Chornomorsk, Mikolayiv, Odessa, Kherson and Yuzhny.

Egypt’s state grains buyer cancelled an international purchasing tender for wheat on Thursday amid reports that no offers of either Russian or Ukrainian wheat had been received.

Russian forces invaded Ukraine on Thursday in a massed assault by land, sea and air, the biggest attack by one state against another in Europe since the Second World War.

“The market is still struggling to get a clear picture of the actual military situation on the ground. The ports in the Azov and Black Sea so far seem not to have been damaged according to the initial shipping agency reports,” one European grain trader said.

The trader said the market was looking out for any declarations of force majeure, meaning suppliers will not fulfil contractual obligations because of extreme circumstances.

Shipping group Maersk said on Thursday it had halted all port calls in Ukraine until the end of February and has shut its main office in Odessa on the Black Sea coast because of the conflict.

Bloomberg on Thursday quoted officials from U.S. grain firm Cargill as saying a ship it chartered was hit in Ukrainian waters in the Black Sea. The empty vessel and its crew are safe and accounted for, the company said.

Russia, the world’s largest wheat exporter, mainly ships its grain from ports in the Black Sea. The Azov Sea’s ports are shallower and have less capacity.

Mariupol, reported to be under attack from Russian forces, one of the biggest Ukrainian ports in the Azov Sea, mainly handles relatively small ships of between 3,000 to 10,000 tonnes deadweight.

The Azov Sea ports export wheat, barley and corn to Mediterranean importers including Cyprus, Egypt, Italy, Lebanon and Turkey.

Another European trader, speaking on condition of anonymity, said such countries would have to seek alternative supplies if the ships were unable to depart in the near future.

Wheat prices in Chicago rose to the highest level in 9-1/2 years on Thursday as the conflict threatened to disrupt the flow of supplies from the region while European wheat futures climbed to a record peak.

Russia and Ukraine account for 29 per cent of global wheat exports, 19 per cent of world maize (corn) exports, and 80 per cent of world sunflower oil exports. Read full story

Russia produced 76 million tonnes of wheat last year and is expected by the U.S. Department of Agriculture to export 35 million tonnes in the July-June season, 17 per cent of the global total.

Russia supplies wheat to all the major global buyers. Turkey and Egypt are the largest importers.

Ukraine asked Turkey on Thursday to close the Bosphorus and Dardanelles straits to Russian ships, the Ukrainian ambassador to Ankara said.

Turkish President Tayyip Erdogan said he backed Ukraine’s territorial integrity but there was no immediate response to Kyiv’s request.

Under the 1936 Montreux Convention, Ankara has control over the straits and can limit the passage of warships in wartime or if threatened.

— Reporting for Reuters by Polina Devitt, Gleb Stolyarov, Natalia Zinets, Michael Hogan and Gavin Maguire; writing by Nigel Hunt.

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