Iraqi Wheat Purchase Causes Controversy

Highly influential members of the Grain Board of Iraq (GBI) are meeting with members of the grain trade and government officials in Washington, D.C. this week to help reestablish a U.S. presence in the market. However, former Australian Wheat Board chairman Trevor Flugge is saying the U.S. is forcing Iraq to buy wheat from them.

According to ABC Rural News reports, Flugge says, "There's no question that the Americans in particular are probably pointing the gun at the heads of Iraqis saying it's about time you bought American wheat."

U.S. Wheat Associates President Alan Tracy reacted strongly, saying, "There is still an insurgency in Iraq, putting people's lives in danger, and Mr. Flugge's characterizations are potentially incendiary. Our friend Mr. Flugge has gone over the top this time."

There's been some concern in the Iraqi marketplace that Australian wheat sold to Iraq may have been contaminated with iron fillings. Flugge refuted the claims and called them "political posturing" from individuals within Iraq trying to destabilize the government.

"We are out to win Iraqi wheat business by providing a good product, reliable export performance and an open exchange of information," Tracy says. "U.S. Wheat Associates has no knowledge of any problems with Austrialian wheat and we have says nothing to disparage their product."

Mr. Khalil al-Assi, director general of the grain board, and Mrs. Ferial Jawoed, the board's acting import manager, will be accompanied by James Smith, the FAS agricultural counselor in Iraq, and by Saad Atallah, a foreign service national at the FAS post in Baghdad will spend almost three full days in meetings here before setting off to join other grain board officials who will be attending a purchasing course, also under USW sponsorship, in Kansas.

In Kansas, they will be joining several other GBI officials who are accompanied by Hesham Hassanein, USW project manager based in Cairo. Beginning next week, the entire group will participate in the highly regarded two-week course on purchasing offered by Kansas State University's International Grains Program.

"We know that Iraq's wheat buyers want to purchase the best wheat, for the best price, through a transparent market system," says Dick Prior, USW regional vice president in Cairo. "We are confident that this course will give them some valuable insights into the U.S. wheat marketing system, and help them make the best deals for their country."

Although Iraq has purchased U.S. wheat since 1963, sales really took off in 1982, when the U.S. gained a 42% market share of wheat sales, and the AWB and CWB largely split the rest. Throughout the rest of the 80's, the U.S., Australia and Canada were vigorous competitors, with each country taking about a third of the market share, give or take a couple of thousand tons.

Reports from earlier in the week also indicated that al-Assi told House members in a House Agricultural Appropriations Subcommittee hearing that the Iraqi grains board had purchased 360,000 metric tons of U.S. rice and 660,000 tons of U.S. wheat. Congress Daily reported that the contracts may not be as firm as al-Assi had implied.