PARIS, France (Reuters) – Iraq’s grain imports remain paralyzed by power politics and spiralling chaos, despite promises earlier this year by the Iraqi government of open and transparent imports, analysts say.
Just a few months ago, the chair of the fledgling Iraqi Grain Board announced that Baghdad was back as a major cereals buyer and declared its import markets open.
With wheat import needs of more than two million tonnes a year, the words came as welcome news to exporters at the time. But grain buying now seems to have run into the sands.
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Results from the board’s second purchase tender for 100,000 tonnes of wheat were due on Aug. 11 but there is still no sign of a deal and traders say they have been left in the dark.
“There is a general problem that the new Iraqi government is hardly functioning. You are dealing with a country at war. It’s not normal commercial negotiations,” one European trader said.
It was supposed to be a new start. Gone were the days of long-term contracts with Australia and the United States.
Against a backdrop of worsening violence in the country, analysts said politics were now playing a part in delaying Iraq’s food buying more than the usual haggling over offered prices.
“It’s pretty simple what’s going on there and it has nothing to do with the price,” said analyst James Dunsterville from AgriNews in Geneva, Switzerland. “It’s totally political. If I had to guess, then the Iraqis might be saying they’d prefer Australian wheat because that’s what they are used to, and the Americans are now blocking it.”
There have been some noticeable improvements. For example, a new trade ministry website carries details of issued tenders and other trade information.
But there are no signs of any results from the wheat tender issued on July 28.
Stories have circulated of an 800,000 tonne purchase from the Australian Wheat Board. The news even prompted a statement of disappointment from the U.S. grain industry, which said it was working to “re-establish U.S. wheat in the Iraqi market.”
However, a day later the AWB denied it had signed any such deal, saying it was in talks about Iraq’s future needs.
“The system isn’t running smoothly, I don’t think anybody knows who is running what,” Dunsterville said.
“But politically they will divide the business between the United States and Australia,” he added.
