May 17, 2006

Iraq suspends wheat tender until new government formed

Iraq has suspended a tender to buy large quantities of wheat until the formation of a new government, head of the Grain Board of Iraq told Dow Jones Newswires Tuesday (May 16).

"We have stopped everything until a new government is formed," Khalil Assi told Dow Jones Newswires from Baghdad.

"The current contract committee at the Iraqi cabinet is no longer and cannot ratify wheat and rice contracts," he said, adding that another contract committee would be set up by the new government.

Iraqi Prime Minister-designate Nouri al-Maliki said Tuesday (May 16) that the formation of the Cabinet was "mostly complete," but an influential Shiite group and some Sunni Arab lawmakers signaled the deal was far from done.

"The next Iraqi government would decide how much to buy," Assi Said.

Iraq consumes some 4 million tonnes of wheat every year, including local production which does not exceed 500,000 tonnes a year.

In the last four months of 2006 the board bought 1.45 million tonnes of wheat, including 500,000 tonnes from Canada, 450,000 tonnes from the US, 350,000 tonnes from Australia and 150,000 tonnes from Germany.

He said that Iraq has enough hard wheat supplies for the next four to five months.