May 22, 2006

Iraqi wheat deal falls through for Wheat Australia

Wheat Australia says it has been unable to reach agreement with the Iraqi Grains Board for the sale of 350,000 tonnes of wheat, citing "commercial issues".

Wheat Australia was set up after Baghdad banned trade with former wheat monopoly AWB after it was investigated for providing kickbacks to Saddam Hussein.

The deal, valued at $100 million, would have led to a resumption of Australian wheat exports to Iraq had it been approved.

Wheat Australia spokesman Ryse Ainsworth said commercial differences with Iraq scuttled the deal. The deal reportedly failed after Iraq insisted on tens of thousands of dollars in compensation in the event of late delivery.

Australian media have quoted unnamed sources saying the deal was untenable after negotiations have dragged on for two months.