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Iraq ready to buy Australian wheat-Deputy PM

Written by: Staff

SYDNEY, March 3 (Reuters) Iraq has told the Australian government that it was prepared to buy 350,000 tonnes of Australian wheat, Deputy Prime Minister and Minister for Trade Mark Vaile said today.

''Overnight the Iraqi ministers have confirmed with us that they are prepared to buy 350,000 tonnes of your grain in the short term, as part of the current tender of 1.5 million tonnes,'' Vaile told a rally of farmers.

Addressing about 400 farmers in the central west of New South Wales state, Vaile said Australia would have continued access to the Iraq market.

Farmers are concerned that an inquiry called by the Australian government into dealings by monopoly wheat exporter AWB Ltd. with Iraq may threaten Australian wheat sales to the country.

Last month the Iraqi Grain Board suspended business dealings with AWB until the inquiry reports on whether the wheat exporter broke Australian laws in allegedly providing 222 million dollars worth of kickbacks to Iraq's Saddam Hussein through the now-defunct oil-for-food programme. The inquiry is due to report by March 31.

AWB had indicated to the government that it would not seek to exercise its right of veto on other companies exporting wheat, Vaile said in a statement issued soon after his address in Parkes.

AWB was willing to provide access for Australian-owned grain trading companies to wheat from the national pool on ''fair and reasonable'' terms, Vaile said.

Three large Australian grower-owned grain companies intended to work in collaboration to bid for the tender, Vaile said, without giving further details.

Eastern grains handler and trader GrainCorp Ltd and barley exporter ABB Grain Ltd. have both said they are keen to export wheat to Iraq. Western Australian group Cooperative Bulk Handling is also seen as a major contender to enter the trade.

A spokeswoman for Vaile said the identity of companies involved was confidential until the deal was finalised. It was not known when this would occur, she said.

AWB's agreement to make wheat available from its export pool took into account the benefits of retaining the Iraq market for Australian wheat growers, Vaile said.

Iraq was Australia's largest market for wheat in the 1990s and early 2000s, taking up to 2.5 million tonnes a year.

Iraq began importing U.S. wheat after the toppling of Saddam Hussein in 2003, greatly reducing Australia's dominant share in one of the largest wheat import markets in the world.

Australia and the United States have been fiercely competing for the market, with US wheat recently out-selling Australian wheat.

Iraq said last month that it was cancelling plans to buy US wheat in its latest tender because prices were too high.

Vaile's announcement today followed his lightning trip to Iraq last weekend to promote Australian wheat sales.

''The Deputy Prime Minister of Iraq, Dr Ahmad Chalabi, has now confirmed that Iraq is looking to buy up to 350,000 tonnes of wheat from Australia as part of a purchase that Iraq is currently negotiating with overseas suppliers,'' Vaile said.


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