March 19, 2009

Iraq, AWB to discuss wheat purchase in April

Iraqi trade officials will meet with Australia's monopoly wheat exporter AWB Ltd. in April to sign an agreement under which it will sell Iraq around 1 million tonnes of wheat a year, an Iraqi trade ministry official and a trader said Wednesday (March 18).


"The Grain Board of Iraq and the AWB will meet next month either in Baghdad or Canberra to sign a memorandum of understanding," Mohammed Hannon, spokesman of the Iraqi trade ministry, told Dow Jones Newswires by telephone from Baghdad.


Hannon didn't say how much wheat Iraq would purchase from the AWB but an Iraqi trader said that Iraq wants the AWB to supply it with 1 million tonnes of wheat a year beginning from 2009.


The planned meeting was the result of negotiations between the two governments when Iraqi Prime Minister Nouri al-Maliki visited the Australian capital Canberra earlier this month.


Australian Trade Minister Simon Crean said earlier this month that his Iraqi counterpart Abdul Falah al-Sudani had indicated Iraq is interested in buying about 1 million tonnes of Australian wheat each year, almost treble the 348,000 tonnes of wheat exported to the country in 2008.


According to Iraqi trade ministry statistics, Iraq needs to purchase around 3.8 million tonnes of wheat a year.


Iraq re-emerged in the mid-to-late 1990s as a major buyer of Australian wheat, with trade peaking at 2.6 million tonnes in fiscal 2000-01.


In early 2006, Iraq suspended business dealings with the AWB following revelations in the Cole inquiry into US$221.7 million in kickbacks paid by AWB to Saddam Hussein's regime to secure wheat sales under a UN oil-for-food deal.


Later in 2006, Wheat Australia Ltd., a joint venture of three other Australian grain companies, exported around 360,000 tonnes of wheat to Iraq. Early in 2008, one-time licenses were granted for wheat exports to Iraq to Louis Dreyfus for 100,000 tonnes and to Glencore International AG for 300,000 tonnes.