June 1, 2006

Wheat Australia closes Iraqi wheat deal

Wheat Australia consortium is expected to announce the sale of 350,000 tonnes of wheat to Iraq by Thursday ( Jun 1) after an impasse nearly scuttled the deal.

However, market watchers felt that Wheat Australia has sold the national wheat pool short by about US$13 million, fuelling speculations on whether political pressure was brought to bear for the wheat to be sold at that price.

The deal with the Iraqi Grains Board came about after three months of protracted negotiations.

The wheat is expected to be sold at US$US190 a tonne on a delivered to Iraq basis.

However, the market has risen about US$28 a tonne, during the past six weeks negotiations were taking place, resulting in potential lost earnings of about US$13 million.

Despite a general feeling that the wheat had been sold short, analysts said the move would result in ultimate gain as Australia gains a foothold in the Iraqi market.