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Iraq to ink wheat deals
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Trade Arabia - [2/21/2006]
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Iraq's grain board said it planned to buy wheat from Canadian, German and US suppliers and would sign contracts next week, after suspending trade with Australia's monopoly wheat exporter.
'Hopefully, we will buy from Canada, Germany and America,' said Khalil Assi, head of the Iraqi Grain Board.
Assi declined to give quantities because of concerns that it would affect wheat prices, but was hopeful Iraq could also buy Australian wheat from firms other than monopoly AWB.
The board cancelled a one million tonne tender for US wheat earlier this month, complaining that prices offered were too high at around $190 to $200 per tonne.
A regional trader said in Damascus that Iraq was buying 400,000 tonnes of wheat from Canada, 150,000 from either Germany or Russia and a smaller quantity of US wheat.
The purchase would mark one of the few times since the invasion of 2003 that Iraq has diversified its wheat sources beyond the US and Australia.
Assi said he expected an Australian delegation led by Deputy Prime Minister Mark Vaile to visit Iraq late this month.
Australia hopes to convince Iraq to overturn a decision to suspend dealings with the AWB pending an inquiry into allegations that it paid kickbacks under the oil-for-food programme.
The stakes are high because Iraq is one of the biggest markets for Australian wheat.
Australian farmers, their silos brimming with a bumper crop, do not want to lose out with Iraq apparently seeking one million tonnes in total.
'We have no problem with the Australian government,' Assi said.
'Hopefully this issue will be resolved and we will be able to buy wheat from other Australian companies.'
Australian Prime Minister John Howard said this week that AWB had potentially agreed to relax its monopoly to let other private traders bid on the Iraqi business.
But traders with private Australian companies were not happy that AWB executive chairman Brendan Stewart would be part of the delegation visiting Iraq.
Iraq suspended business dealings with AWB this month until after the Australia's commission of inquiry into AWB's dealings with Saddam Hussein ends. The inquiry is due to report by March 31 -- well after the Iraqi tender is expected to be settled.
In late 2004 Iraq bought 236,000 tonnes of German wheat, thought to be the only purchase from Europe since the invasion, before settling into a fixed pattern of buying from the US or Australia.
European traders have long argued they could supply more cheaply than the US and Australia and have said that Iraq's purchases were influenced by political factors.
Assi said last week that Iraq planned in future to buy from any supplier that could meet the specifications and offer the right price, after complaining offers on its one million tonne tender for US wheat were too high.
European traders were known to have submitted speculative bids in that tender, though US supplies had been specified.
Last week, Iraq was said to have asked traders in Germany and other European countries for prices.
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