Iraq, under criticism for a shadowy procurement system dating from the days of Saddam Hussein, is negotiating to buy 300,000 to 500,000 tonnes of US wheat, people familiar with the talks said on Thursday. The Iraqi Trade Ministry is considering offers from mostly small traders but shipments would be ultimately secured through larger suppliers - a practice some blame for higher prices and less reliable imports, they said.
Iraqi trade ministry officials, who are trying to solve a shortage of state-supplied staples that has raised domestic market prices, declined to confirm volumes under discussion.
"Nothing is final and no quantities are yet fixed," Trade Minister Mohammad al-Jiboury, who has been leading efforts to reform the system, told Reuters.
Imports of wheat and other staples have been delayed, adding to shortages of vital supplies.
A contract estimated at 50,000-150,000 tonnes of US wheat has been awarded to Telwar, a trading company based in Tennessee, but volumes have not been secured in time, officials said. Telwar executives were not available for comment.
Rice imports have been also delayed because of problems in trucking them from Jordan's Aqaba port, including shipments sold by Chaiyaporn, a Thai company that was a major supplier to Iraq during Saddam's rule.
Several regions have not received rice and sugar rations this month. The market price of rice has doubled to 500-1,000 dinars (35-70 US cents) per kg, depending on quality.
However Alia, an Amman-based company contracted to transport rice from Jordan, said the delays were over. Alia is owned by the Iraqi government and al-Khawam family, a major business partner of the former Baathist government.
Othman Abasi, an Alia executive, blamed the delays on restrictions imposed by Jordan on traffic to and from Iraq, not on higher wages that drivers have been demanding.
"There are 2,000 trucks backed up. We are thankful because Jordan has agreed to grant exceptions for rice," he told Reuters, adding that 29,000 tonnes of a 35,000-tonne ship belonging to Chaiyaporn were on their way to Iraq.
A second rice ship was being offloaded at Aqaba by another company, Abasi said.
Every three months, Iraq requires 250,000 tonnes rice and one million tonnes of wheat.
The country imports most of its wheat through the ageing Umm Qasr port, which is struggling to cope with shipments that have cost millions of dollars in demurrage payments.
Iraq began to import more US wheat after July, when power was transferred officially to an American-backed government. The World Food Programme ran the country's procurement for a few months after the war.
US wheat producers say Iraq could have secured wheat more competitively if it had not relied on Australia and its wheat board monopoly as main supplier for the last 12 years.
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