Iraq secures financing to speed up wheat imports

Iraq will soon receive a $300 million guarantee to finance future imports of Australian wheat and speed up purchases, Iraqi Trade Bank head Hussein al-Uzri said on Thursday.
The deal will enable Australia to catch up with the United States, its main competitor for the Iraqi market, which has already extended a $500 million guarantee to Baghdad.
Of that, some $320 million has been used to buy US wheat and rice. "We are pleased with the Australian offer. It will accelerate the flow of Iraq's food supply. We will sign the agreement in Baghdad next month," Uzri told Reuters.
"These deals allow the Trade Bank to improve its credit history, strengthen its financial position and proceed with leading the Iraqi banking sector toward recovery," he said.
The Australian guarantee, handled through the government's Export Finance and Insurance Corporation, comes as the two countries seek to resolve a dispute involving claims for demurrage from Australia and Iraqi demands for compensation over Australian shipments allegedly contaminated with iron ore.
Australia had long dominated the three million tonnes a year market, but Iraq has recently gone to US suppliers to fill large wheat orders.
Almost of all of Iraq's state procurement is handled by the Iraqi Trade Bank, which was set up in 2003 and has done $7.5 billion of trade financing since, mostly for imports paid for by the US-backed government.
The bank deals with more than $70 million a month of Iraqi wheat and rice purchases and more than $2 billion a year worth of refined fuel imports needed to plug shortfalls in domestic production that arose after the US-led invasion.
Uzri said the bank plans to move swiftly into consumer finance and help rebuild a banking system wrecked by a crushing embargo from 1990-2003, over-regulation in the Saddam era and violence since the 2003 war.
"We want to give ordinary Iraqis access to mortgages, consumer finance and credit cards together with our associate Iraqi banks," said Uzri, who worked in European finance before returning to Iraq to set up the bank two years ago.
Uzri said the Trade Bank will implement a new credit policy soon accessible through a network of branches expanding beyond one already in Baghdad and another in Kurdistan.
The banks is planning to set up 35 branches across Iraq by the end of 2006 and deploy 40 automatic teller machines in secure buildings, such as airports, on top of one already operating at the Trade Bank's Baghdad headquarters.