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UPDATE 1-Syria fails to exchange its durum for Russian bread-making wheat

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DUBAI, Sept 26 (Reuters) - Syria has canceled a tender to exchange 100,000 tonnes of its durum wheat for the same quantity of soft Russian wheat for bread-making, and is shortly to announce another bid to procure supplies, a government source said on Thursday.

Syria's General Establishment for Cereal Processing and Trade (Hoboob) originally issued the tender with a Sept. 17 deadline for offers, but no agreement was reached and the process was called off, the source said.

The source did not provide details of the replacement tender, which is due to be announced imminently.

Swaps are relatively unusual in the wheat market, with cash purchases a more common way of acquiring new supply.

Wheat in Syria is used in the production of flat bread, a subsidized staple for a population that has suffered under a conflict estimated to have killed several hundred thousand people and forced millions to flee their homes since 2011.

Durum, usually used in pasta, is unsuitable for Syria's bread-making needs.

Hoboob bought 900,000 tonnes of local wheat this season, with a United Nations report this month saying Syria's wheat and barley crops improved this year, helped by rainfall and better security. Still, food security remains a challenge.

The U.N. report estimated wheat production for the 2019 season at 2.2 million tonnes, up from the 29-year low of 1.2 million tonnes last year.

But the figure still falls far below the 4 million tonnes Syria was capable of producing prior to the war.

The steady fall in output has put President Bashar al-Assad's government under increasing pressure to import grain - a process complicated by financial sanctions. (Reporting by Maha El Dahan; Editing by Himani Sarkar and Jan Harvey)