February 2, 2005



Australia's confident of securing Iraqi wheat market


Australian wheat exporter AWB Ltd. (AWB.AU) is confident it can hold onto a majority share of Iraq's market for imported wheat, despite higher competition from the U.S., AWB Chairman Brendan Stewart said Wednesday.


The chairman added that he would not underestimate the strength of US imports in export markets.


AWB is also aware of other increased competition in wheat sales to Iraq and the reintroduction of export subsidies by the European Union, he said.


Other major wheat suppliers to Iraq include Canada, European Union nations and the U.S. Smaller suppliers include Pakistan, Russian Federation, Turkey and Ukraine.


The U.S. Department of Agriculture confirmed last week that 165,000 metric tons of U.S. hard red winter wheat had been sold to Iraq for the 2004-05 marketing year.


Australia has been the dominant supplier of wheat to Iraqi for more than a decade, with wheat exports totaling 0.5 million tons to Iraq in the third quarter of 2004, it said.


AWB announced October 6 last year the sale of 1 million tons of new crop wheat to Iraq for delivery over the following 6 months.


"We're still doing that," Stewart said in an interview on radio.


"We're very confident that we can continue to maintain the lion's share of that market," he added.


Australia is proposing to build an A$20 million state-of-the-art flour mill in Iraq to help cement its position in the trade, he said. The Australian government is considering a feasibility study on this proposal at the moment, he added.


In December, the government's Australian Bureau of Agricultural and Resource Economics, or Abare, estimated Iraq will need to import about 2.5 million tons of wheat in the year to June.


Imports have averaged about 2 million tons/year since the mid-1990s, with Australia as main supplier, it said.