Wheat Australia says Iraqi deal not sealed yet

SYDNEY, Mar 29 (Reuters) Australia was close to a landmark wheat sale to Iraq but a deal had not yet been finalised, a spokesman for Wheat Australia said today.

Iraq's Grain Board said it had bought 500,000 tonnes of wheat from Australia at 190 dollar a tonne, along with 450,000 tonnes from United States firms at 189 dollar a tonne, to complete a 1.6 million tonne tender issued in January.

''Negotiations are still progressing in a very positive way but we haven't finalised arrangements yet,'' Mario Falchoni, spokesman for GrainCorp Ltd., one of three companies that comprise the new Wheat Australia group, said today.

Wheat Australia was formed earlier this month to export wheat to Iraq after the Middle Eastern country refused to deal with monopoly exporter AWB while it was being investigated for alleged kickbacks to the former regime of Saddam Hussein.

Eastern Australian grains trader and handler Graincorp is joined in Wheat Australia by South Australia-based barley exporter ABB Grain Ltd. and Western Australian bulk handler and trader Cooperative Bulk Handling.

Graincorp's Falchoni would not confirm price or quantity figures for the Iraq deal, but said he expected an agreement in the near future.

An Australian government inquiry is due to report by June 30 on AWB's past dealing in Iraq.

The tender purchase of 1.6 million tonnes would fill Iraq's wheat import requirements for five months, Khalil Assi, the head of Iraq's Grain Board, told Reuters in Baghdad yesterday.

Iraq also bought 150,000 tonnes of wheat from Germany at 187 dollar per tonne, Assi said.

''We have completed the procedures from our side and we have signed the contract to buy 500,000 tonnes of wheat from the Australian firms, but we are still waiting for them to sign.'' Assi also said Iraq had signed contracts with four U.S. firms -- Louis Dreyfus, Colombia Grain, ADM and Cargill -- to buy 450,000 tonnes. Iraq initially had said it was only buying 150,000 tonnes from U.S. firms because their prices were high.

Australia and the United States, which opposes the export monopoly run by AWB, have been competing fiercely for the big Iraq market. Australia dominated in the 1990s and early 2000s before Iraq began importing U.S. wheat after the toppling of Saddam in 2003.

There would be no other sales of Australian wheat to Iraq than from Wheat Australia, which is sourcing wheat from AWB's export pool in return for a margin to cover risk, Falchoni said.

REUTERS PDS RN0750