DUBAI, UNITED ARAB EMIRATES, AUG. 31 -- Middle East traders seeking to profit by evading international economic sanctions against the Baghdad government have begun moving sugar, tea and rice, along with spare parts for cars and machinery to Iraq over ancient smuggling routes that Western officials acknowledge are virtually impossible to block.

Traders and bankers in the Persian Gulf region who provided an account of the smuggling trade said it is too early to tell whether such trafficking will have much effect on Iraqi shortages of food and supplies. In Washington, moreover, some economic analysts and Bush administration officials described violations of the embargo as minor and contended that smuggling cannot provide sufficient supplies to meet Iraq's needs.

Nevertheless, some Western officials here expressed concern that even limited smuggling could help Iraqi President Saddam Hussein hold his ground for months in a stalemate with the West.

Sanctions enforcement in Middle East waters by U.S. and European warships appears to have plugged what had been viewed as the main hole in the wall of economic isolation around Iraq -- the Jordanian port of Aqaba. But U.S. officials warn that new leaks have opened, including reported airlifts of food to Iraq from countries such as Yemen and Sudan.

Diplomatic efforts may limit any such government-sponsored attempts to break the sweeping sanctions against Baghdad imposed by the United Nations, officials said. Nevertheless, merchants and financiers here said, no government can stop the flow of goods handled by private, largely apolitical traders and smugglers seeking wartime profits by supplying Iraq with desperately needed food, spare parts and machinery -- if Baghdad has enough money to pay for them.

{In an indication of Iraqi shortages, sources in Baghdad said nationwide food rationing would begin Saturday, the Associated Press reported. Coupon books were issued to prepare for rationing; food distribution centers have been set up, and long lines formed at bakeries in the capital and at food shops in small towns, the sources said.}

Smuggling "happens -- even with the Colombians when they take drugs to the United States," said Abdul Rahman G. Mutaiwee, director general of the Dubai Chamber of Commerce and Industry and the official responsible for licensing Dubai's billion-dollar export industry. "Criminals -- you will find them everywhere. You cannot control them."

Like a number of traders and bankers in the gulf region, Mutaiwee expressed particular concern about smuggling via dhows, wooden trading ships, up to 200 feet long, of a type that has been used in the gulf and the Indian Ocean for thousands of years. Dhows carry about $450 million in goods each year from Dubai to Iran, docking at small coves, harbors and islands along the southern gulf coast.

Experienced Arab traders here said smugglers already are making arrangements to divert the legal dhow trade between Dubai and Iran across the disputed Shatt al Arab waterway into southern Iraq. They said such diversions are risky in the present atmosphere, but by no means impossible -- as long as there is cash available to bribe low-level Iranian customs and border officials.

Mutaiwee said that because the dhows carry papers allowing them to dock legally almost anywhere along Iran's gulf coast, it will be impossible for Western warships to stop them from shuttling goods close to the Iraqi border. From there, he said, "it can be an easy flow of goods -- just crossing from one bank to another bank. If there are some corruptions, it could be a problem."

"I would go on the assumption that if {the Iraqis} have the money, they are going to get the goods," said a Western diplomat with long experience in the region. "There are enough people to profit, from the Dubai middleman to the Iranian middleman to the dhow owner to the supplier."

Many in the gulf accept Iran's statement that it supports the U.N. sanctions against Baghdad. But the smuggling routes described by traders here -- across the Shatt al Arab waterway and overland farther north -- appear difficult for the Tehran government to close, if it seeks to do so.

Petty bribery is commonplace along Iran's roads and at land borders. U.S. drug enforcement agents say large quantities of heroin are smuggled overland through Iran to Turkey. The drug trade is facilitated by payoffs to border and police officials, they say.

Arab traders here who have dealt extensively with both Iranian and Iraqi markets said that even during the eight-year Iran-Iraq war, several dozen traders managed to move goods back and forth across battle lines. Since a 1988 cease-fire, these traders said, such trafficking has become easier.

Goods can be moved to the Iran-Iraq border from places other than Dubai. Lebanese traders have been quoted by Reuter as saying that arrangements have already been made by Palestinian and Lebanese merchants to ship food by sea to Turkey and from there overland into Iraq. Turkey's border with Iraq is short, mountainous and difficult to traverse, but its border with Iran is relatively easy to cross, and after that crossing, goods could be brought from Iran overland into Iraq.

The Reuter report quoted unnamed traders as saying that Iraq had already helped set up import-export offices in Cyprus by using Palestinian and Lebanese middlemen. Traders and bankers here said the Baghdad government and private Iraqi traders are making a similar effort in the gulf region. "Saddam can't do it directly now," said a banker who finances gulf trade. "He is looking for friends to be middlemen."

There is no shortage of goods to be brokered here along Dubai's bustling "creek," a shallow inlet off the gulf where dhow owners and merchants come to trade American refrigerators, Japanese televisions, Thai rice, Sri Lankan tea, Australian cooking oil, New Zealand butter and a wide assortment of garments and industrial and automotive spare parts and machinery.

Many dhow owners belong to families of Iranian descent who moved to Dubai several generations ago. They have maintained family and trading contacts in Iran, Iraq and around the gulf. Although dhows carry far less merchandise at a time than do giant tankers and cargo ships, overall trade by the dhows, particularly with Iran, is estimated to be considerable, amounting to hundreds of millions of dollars a year.

While executives at shipping companies in the West and Middle East have expressed support for the U.N. sanctions against Iraq, dhow merchants and crews here -- many of them Iranian, Pakistani and Indian seamen who sleep on their boats while away from their families -- appear to have little interest in the political machinations underway to isolate Saddam.

In informal interviews up and down the creek, dhow merchants and crew members said their main concern was to avoid being questioned or arrested by authorities seeking to enforce the U.N. sanctions. Asked about Iraq's invasion of Kuwait, a sizable minority said they approved of Saddam and had no objection to his actions.

Iraq's need for food and supplies could be substantial. A nation of 17 million people, Iraq incurred an import bill last year exceeding $10 billion, including an estimated $2.5 billion for food.

Because Iraq paid for its imports with cash generated by oil sales -- about $12 billion in 1989 -- Western efforts have focused less on stopping all imports than on attempting to deprive Iraq of oil revenues with which to pay potential violators of the embargo. Since the major export routes for Iraq's oil are through Turkey, the Red Sea and the Persian Gulf, U.S. military officials have expressed optimism that the oil spigot can be turned off almost completely.

If Iraq is unable to trade oil in barter deals or to sell oil for cash, it likely will have difficulty paying private traders or sympathetic governments willing to risk breaking the embargo over the long term, according to gulf bankers and Western analysts.

In the short run, Iraq's ability to pay for smuggled goods during the next six to 12 months may depend in large part on how much cash, gold bullion and negotiable financial instruments Baghdad seized from Kuwait after its Aug. 2 invasion, analysts say.

Some reports have estimated Iraq's seizures in the billions of dollars, enough to buy perhaps a year's worth of imported food if supplies are rationed. But other reports have suggested that Iraq was able to remove less than $1 billion in negotiable assets from Kuwait. If so, it might soon run out of money for smuggled goods.

Iraq has little besides money and oil to trade. Even before the invasion and embargo, its trading partners had grown wary because of delays by the state-controlled import authority in paying its bills. Irked by Iraq's unpaid debts, Turkey instituted a credit squeeze in 1988. Traders in the gulf region said they insisted that Iraq meet unusually high credit standards.

One Arab trader recounted receiving an order from an Iraqi counterpart for 100,000 Arab garments, to be manufactured in China and shipped through Dubai. But when the terms of the deal were negotiated, the Iraqi said his government could only afford to pay for the clothing with fruit. "He wanted to pay in dates," the trader recalled. "Dates. I laughed at him."

In the present environment, traders and bankers said, not only will Iraq have to pay with cash or financial instruments that are readily convertible into hard currency, but Baghdad will have to pay traders many times the normal price for smuggled goods. Such premiums will further drain whatever cash or barter materials Iraq has to offer.

Still, traders and bankers here said, the smuggling effort now underway may provide Baghdad with crucial, if limited time to pursue its strategy. As a result, government officials here said they intend to take steps to crack down on smuggling.

"The only way is to be sincere in implementing these sanctions and to recognize the danger of feeding your enemy," said Dubai's Mutaiwee. "Everybody has to feel it."