March 28, 2006

Iraq buys 500,000 tonnes Australian wheat

The Grain Board of Iraq has bought 500,000 tonnes of wheat from Australia's AWB Ltd at US$190 a tonne, the head of the grain board said Tuesday (Mar 28).

The purchase is the first for months since Baghdad suspended its ties with Australia's monopoly wheat exporter AWB over allegations that it paid kickbacks to Saddam Hussein's regime under the oil-for-food deal with the UN.

"We have signed a contract to purchase 500,000 tonnes of wheat from Australia and we are waiting for them to sign the contract," Khalil Assi told Dow Jones Newswires.

Assi also said the board has increased its wheat purchase from US suppliers to 450,000 tonnes instead of the 150,000 tonnes announced earlier.

Assi said the wheat from the US was purchased at two prices, US$190 a tonne and US$189 a tonne. He did not mention the names of the US firms that would be supplying the wheat.

Assi said the new purchases from Australia and the US brought Iraq's total wheat purchases in 2006 to 1,450 million tonnes. Earlier, the board bought 500,000 tonnes from Canada.

Assi said Baghdad is still willing to buy up to 150,000 tonnes of German wheat but so far no contract has been signed.

Suppliers outside the AWB recently set up a new company called Wheat Australia Ltd to undertake wheat exports to Iraq.

Wheat Australia is a consortium comprising GrainCorp Ltd, ABB Grain Ltd and unlisted Cooperative Bulk Handling Ltd. The company submitted its price last Tuesday on a free-on-board basis to the Grain Board of Iraq.