By John Schnittker, Chief Economist at Schnittker Associates, and former Ministry Advisor at the US Embassy in Baghdad.
Heavy rainfall over the southern provinces of Iraq during early May has potentially reduced Iraq’s expected wheat harvest by 25-30% according to a statement by Trade Minister, Dr. Khairallah Hassan Babiker. Initial reports indicate that losses are greatest across Muthanna, Dhi Qar, Maysan and Wasit.
Reports of damage are also coming in from Diyala where heavy rains occurred on May 7th. Significant losses in Wasit would be a major setback as Wasit is a major producing area, and supplier of wheat to the Public Distribution System. The full extent of the damage is not expected to be known until next week.
Wheat that had been harvested, as well as crops in the field have been affected. The unseasonable rainfall apparently caught everyone unprepared as harvest usually coincides with dry and warm conditions. Muddy fields will hinder harvest efforts where crops were not destroyed.
Iraq had been anticipating a bountiful harvest of around 4.0 million tons, the largest crop since 2010. While the severity of the loss to wheat production has yet to be determined, a loss of 25% or around 1.0 million tons would be a severe blow to farmers across Southern Iraq. It seems likely that some of the damaged wheat will be able to move into animal feed channels, mitigating the losses faced by farmers.
One concern is that much of the wheat affected by the heavy rains was destined for the Public Distribution System, (PDS) Iraq’s nutrition program that distributes flour, rice, sugar and sun oil to all Iraqi citizens. The loss of a sizable portion of the wheat crop does have the potential to disrupt the distribution of flour. However production shortfalls in the south will more than likely be compensated for by increased production across the north. Regrettably this will not help farmers who have suffered lost production. Iraq may also face logistical problems moving both domestic wheat and imported wheat to meet PDS requirements during the harvest season.
Iraq will continue to import both wheat and flour, as local production while showing increases in recent years is not enough to meet Iraq’s needs. Iraq’s total wheat requirement are approaching 7.0 million metric tons, as PDS requirement alone are around 4.5 million tons; the wheat equivalent of flour imports, 1.4 million metric tons and feed use make up the remainder of wheat demand in Iraq.
Generally favorable weather is forecast for the next 7 days, with dryer conditions across the south, and a showery pattern further north. The wheat crop in the more northern areas can still benefit from additional rainfall.
(Picture: Storm clouds stretch from the Arab Gulf to Salah Ah Din province as weather systems spins over Muthana and Najaf on May 3rd, 2013)