May 23, 2006

 

Australian ministry says Iraq wheat sale could still be done

 

 

Wheat Australia Ltd could yet still complete lengthy negotiations for the sale of 350,000 tonnes of wheat to Iraq, which is considering cutting an unacceptable clause from a supply contract, Agriculture Minister Peter McGauran said Tuesday (May 23).

 

"Negotiations are not necessarily over," he said in an interview on Australian Broadcasting Corp radio.

 

Wheat Australia is working hard to complete the sale and has taken a tough stance on one clause in the contract it believes will commercially disadvantage Australian growers, he said.

 

"That's entirely proper and the right thing for them to do, and it may well be that the Iraqi side is now reconsidering their insistence on the insertion of that particular clause," McGauran added.

 

The Grain Board of Iraq expressed surprise Monday at news that Wheat Australia had not been able to agree on a contract to supply the wheat.

 

"Wheat Australia has not informed us that they ended talks with us," said Khalil Assi, head of the board.

 

The price in the contract was fixed at US$190 a tonne early in the negotiations, which have been underway for two months, but the global price for wheat has risen at least US$15/tonne since.

 

The talks broke down over a minor default fee being sought by Iraq, an industry source said.

 

Wheat Australia comprises GrainCorp Ltd, ABB Grain Ltd and unlisted Cooperative Bulk Handling Ltd.