Australia and the United States remain fierce competitors to supply wheat to Iraq, a rivalry undiminished by claims and counter-claims over alleged kickbacks to Saddam's regime by Australia's monopoly wheat exporter.
Transportation of the wheat is at the centre of the competition between the world's two biggest wheat exporters. Transportation was also at the heart of a payment system that a United Nations report contends led to illicit payments to Saddam's former government.
The report released on Thursday by a UN-established Independent Inquiry Committee, led by former US Federal Reserve Chairman Paul Valqua, said the Australian Wheat Board (AWB) paid over $221.7 million to a Jordanian trucking company, which delivered kickbacks to Saddam's government.
AWB's managing director Andrew Lindbergh on Friday said his group had no way of knowing where payments to the trucking company ended up. The UN report said that the former Australian Wheat Board should have known.
Allegations of kickbacks have been circulating for years, although they have never been detailed as fully as in the UN report. AWB's main rival in Iraq, US Wheat Associates, claimed as far back as mid-2003 that Australia had been selling wheat to Iraq at inflated prices to allow payments to interests of Saddam.
AWB denied those claims just as it has denied the revived claims. But the battle for Iraq's wheat market is intensifying in new ways between Australia, which held most of Iraq's 3 million tonnes a year wheat import market in the 1990s, and the United States, which re-gained entry when it toppled Saddam in 2003.
After the United States won a one-million-tonne sale this week, the big question now is whether AWB will agree to allow Iraq to control the shipping in wheat deals, or whether AWB will insist that it controls the transport.
Iraq on Thursday awarded a tender for one million tonnes of wheat to two US firms, Columbia Grains and Louis Derives, at $190 a tonne fob (free on board).
Australia declined to bid for the tender because it wanted the contract to be let on a CIF (cost and freight) basis, which would have given it control of the shipping.
AWB has built up ship chartering in recent years to the point where it operates the freight on almost half of the grain it exports. It is keen to control the freight because of the extra profits it generates.
Iraqi officials have been quoted from Baghdad as saying that Australia will have to agree to fob terms if it is to win sales. A spokesman for AWB declined to comment earlier this week when asked by Reuters if AWB would only sell wheat to Iraq if deals were on a cif basis.
Asked the same question on Friday, Lindbergh said: "That is something we are still negotiating with the Iraqis about."
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