May 30, 2006

Australia's wheat sale to Iraq back on track after government intervention

Australia has finally clinched a US$90 million wheat sale to Iraq after a punitive clause nearly derailed the 11 week-old negotiations.

The 350,000 tonne sale was put in peril recently after Wheat Australia could not agree to terms set by the Iraq Grain Board.

The main obstacle was Iraq's insistence on punitive late fees which would have cost Wheat Australia US$0.20 a tonne of wheat for each day shipments were delayed.

The clause was dropped after high-level government officials intervened last week.

Wheat Australia is a consortium composed of ABB, CBH and GrainCorp.

The deal provides Wheat Australia with a solid platform from which it can continue with a future association with one of Australia's most crucial markets, said CBH's Rhys Ainsworth

The first shipment of grain is due to leave Australia in June, Ainsworth said.