No Iraq contracts expected for AWB

IRAQ is "highly unlikely" to buy wheat from Australian exporter AWB this year, although it could resume purchases in 2008, according to reports in English-language newspapers circulating in the Middle East.

IRAQ is "highly unlikely" to buy wheat from Australian exporter AWB this year, although it could resume purchases in 2008, according to reports in English-language newspapers circulating in the Middle East.

Despite claims that it would resume purchases of Australian wheat once the Cole inquiry was complete, Iraq has committed itself to the purchase of millions of tonnes of US wheat.

The English-language Gulf News quoted AWB International chairman Ian Donges yesterday as saying: "I suspect that's going to be the way it'll continue in the short term."

The Iraqi Grains Board suspended its relationship with AWB when the company was revealed as a major supplier of funds to the regime of Saddam Hussein in October 2005.

AWB hoped to resume sales once the Cole inquiry into the scandal released its report last November, but US farmers appear to have sewn up the market, at least for the next 12 months.

Iraq previously purchased 2.5 million tonnes of wheat annually from Australia.

The US has aggressively courted the market since the war and is providing the Iraqis with financial and technical assistance.

Attempts by AWB's Australian rivals to enter the market have had mixed results.

When AWB was banned from the market, a consortium known as Wheat Australia was formed to export wheat to Iraq.

It has sealed one major deal and in December the group received permission to pursue further sales to Iraq but several planned deals have collapsed.

Mr Donges was not available for comment yesterday and a spokesman for AWB said he could not verify the comments in the Middle East press "although the substance is accurate". Mr Donges was reported as saying he did not envisage a "permanent boycott" by Iraq.

Australian wheat farmers did not grow enough grain in drought-affected 2006 to justify sales to Iraq, but Mr Donges said he hoped for a big Australian wheat crop in the current growing year to March 2008.

"It's a catch-up year for virtually everybody, financially and in other ways. There will be the potential for a very large planting of wheat in this country," he said.

Mr Donges is a wheatgrower in central NSW.

He said AWB was trying to "satisfy as many customers as we can" given the reduced size of the crop and the fact that many farmers did not deliver to AWB. "We're spreading sales out. We don't want to sell all of that wheat in the first half of '07," he said.

The Howard Government last year formed an "expert panel" to consider the future wheat export marketing arrangements.

The panel last week drew up a plan to visit 25 wheat-growing centres around Australia to allow wheat farmers to have a say on the future of the single desk for export sales.

Meanwhile, a federal police taskforce is considering the Cole report.