Iraq has agreed to purchase 500,000 tons of Australian wheat from a new non-Australian Wheat Board wheat consortium calling itself "Wheat Australia," according to Dow Jones. According to Dow Jones, the Iraq Grain Board also bought an additional 300,000 metric tons of U.S. wheat, on top of the 150,000 tons announced earlier.
The Australian wheat sale was made by a consortium of non-AWB organizations, under FOB terms that were refused by the AWB and initially resisted by the eventual sellers.
A statement from U.S. Wheat Associates Vice President Vince Peterson says if the reports are correct, it is the first time an entity has been able to force a major crack in the Australian wheat monopoly for over 50 years. "This crack in the AWB monopoly, combined with newly aroused free market efforts in the Australian trading community, is an important development in the global wheat trade,"
The Iraq Grain Board refused to do business with the AWB until the Australian government has completed its inquiry into hundreds of millions of dollars in AWB kickbacks to Saddam's regime.
The Australian government opened an inquiry, with public hearings since January, which will report on whether decisions, actions, conduct or payments by AWB breached any federal, state or territory law in Australia. The commission was originally mandated to provide a report by March 31, but that deadline has been extended to June 30.
Australia is the world's second largest wheat exporting origin. In the last marketing year, the U.S. exported 28.5 million metric tons of wheat, followed by Australia at 15.8 million metric tons. Canada was a close third, at 15 MMT.
Iraq is currently the 4th largest U.S. wheat customer, purchasing 2.03 million metric tons in MY 2005/06, as of March 16.