Iraq grain board chief sees bigger wheat crop as weather improves


Iraq's new grain board chief said on Tuesday he expected local wheat production at no less than 2.5 million tonnes in the 2018 season, an improvement over previous forecasts on the back of recent rainfall.

Iraq had said in February it expected wheat and barley production to drop by around 20 percent from 2017 due to dry weather.

Iraq needs an annual wheat supply of between 4.5 million and five million tonnes, implying an import gap of around two million tonnes for the year.

"There are areas that have also now been added to our local purchasing plan like Mosul and Anbar which will fill any dips in production if they happen," Maksousi said.

Iraq lost production from Nineveh, its most fertile province of which Mosul is the capital, after Islamic State took control.

However, the government declared victory over Islamic State in December, having taken back all territory the militants captured in 2014 and 2015.

Maksousi has been acting head of the state grain buying agency responsible for the bulk of the country's wheat and rice imports for around a month after the previous chief, Haitham al-Khishali, left to a more senior position at the trade ministry.

The grain board, which falls under the trade ministry, regularly announces international purchasing tenders, to import wheat for the country's food rationing programme, which covers flour, cooking oil, rice, sugar and baby milk formula and was created in 1991 to combat U.N. economic sanctions.

Under the system, imported wheat is mixed with local grain to produce flour. Impoverished Iraqis continue to depend on the system, which has become corrupt and wasteful over the years.

The grain board buys wheat of U.S., Canadian and Australian origin, making it one of the few major grain purchasers in the region, alongside Saudi Arabia, that has so far resisted cheaper Russian and Black Sea origins.

Black Sea sellers have provided stiff competition to the United States in North Africa and the Middle East over recent years, winning market share.

But Maksousi said Russian wheat quality was not suitable for the production of flour for the rationing programme because of the nature of its gluten content.

"If we mix Russian wheat with local wheat it will not be suitable for our bakeries," he said.

Still Maksousi did not rule out importing Russian wheat should specifications change in the future.

"If we find Russian wheat with Iraqi specifications, then we will start to buy it," he said.

Iraq's trade ministry struggled to import grains last year after introducing new payment and quality terms that kept traders away from its international tenders.

In May, the cabinet authorised the ministry to make direct purchases of wheat and rice to guarantee food security, a reflection of its struggle to attract enough interest through the tender process.

Since then it purchased 500,000 tonnes of U.S. wheat in a direct deal in November outside of the tender process.

Further talks for U.S. origin grain failed to result in a second purchase this month due to high prices.

Still, Maksousi said buying would continue through both methods to secure the country's needs.

"When we find the need to tender we will and if we find the need to sign direct deals, we will," he said.

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