Iraq plans to buy 30,000 metric tons of basmati rice from India and Pakistan, according to a report from Bloomberg.

Fawziyeh Hameed, a spokeswoman for the Trade Ministry, told the news agency that the deadline for suppliers to submit bids is April 22. Bids should be valid until April 26.

Iraq reportedly bought 53,000 tons of basmati from India in a tender that expired on 10th of April 10.

Local production is forecast to climb to 250,000 tons this year, up from last year’s 150,000 tons, but the country consumes 1.25 million tons of rice annually.

(Source: Bloomberg)

(Photo credit – Gunkarta Gunawan Kartapranata)

By Layth Mahdi, Agricultural Advisor. The opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Iraqi people are like a camel eating grass and carrying gold! Despite the huge oil budget (more than $100 billion/year), poverty and unemployment are the major issues facing the Government of Iraq (GoI).

The growth of the agriculture GDP declined sharply from 7.5% to less than 1% since 2003. The price of food is rising and people cannot afford to buy food especially those who suffer from low income in remote and rural areas. Over 90% of the vegetable and fruits are imported.

The reasons behind this are:

1. after 2003 Iraq suddenly shifted to a free market without any government plan and support;
2. the agriculture production depend on four ministries (Ministry of Agriculture, Ministry of Industry, Ministry of Water & Resources and Ministry of Trade) in addition to the Agricultural Initiative by the PM Al Maliki (failed program). Those five institutions required leadership and vision; however, the top decision makers lacked experience, planning, and management strategies.

Recently, I met and contacted a few senior advisors close to the PM Al Maliki and Members of Parliament. I found that the advisors lacked concern about food security, poverty and unemployment in the country. Creating a fund to restore agriculture production and fighting poverty and unemployment is not on their agenda.

The PM should act urgently to create jobs and stop growing poverty and unemployment. He needs fresh faces and ideas to improve the economy. He must create agricultural working groups, as the agricultural sector absorbs a large unemployed. Agriculture has the potential of providing over one million jobs opportunity. This will attract enormous local & international investments in agribusiness sectors across Iraq (read my articles in Iraq business news).

GoI suggested a budget of 105 billion dollar for this year. Tensions and hunger are rising and within a few years we may see hunger driven revolution upcoming in the south of Iraq that will have a negative impact on GoI. Any increase in monthly oil production MUST consider those who live in poor conditions. About 9 million people currently live under the poverty line ($2 per day). If the current situation continues without socioeconomic development, poverty will rise by 30% by the end of the PM presidency in 2014.

Iraq plans to produce 4.5 million tons of wheat, and substantial increases in other cereals, according to a report from Azzaman. This would mean the country would meet its domestic requirements of around 3.5 million tons, with a 1 million ton surplus available to export.

The Undersecretary at the Agriculture Ministry, Ghazi al-Aboudi, said the ministry was introducing new irrigation techniques that will reduce farmers’ dependence on erratic rainfall.

The Ministry’s agricultural bank has also been extending easy loans to farmers worth hundreds of millions of dollars.

No timeframe was given to meet this goal, but Aboudi said his ministry had already achieved “20 percent” of its strategy initiated in 2008 to reach the highly ambitious goal.

Aboudi said agriculture accounted for only 10 percent of the economy, but contrary to earlier press reports he said the country could produce more than 50 percent of its domestic needs for wheat and 28 percent for rice in 2011.

Poultry produce, he added, met 55 percent of domestic needs.

(Source: Azzaman)

The Iraqi Agriculture Ministry has reportedly ‘demanded’ that the ministries of planning and finance increase the Palm General Authority’s allocations from 4bn to 8bn IQD ($3.4m to $6.8m) to ensure the success of the annual plan for the development of palm groves.

According to AKnews, Kamel Mukhlab, the director general of the authority, said they now have six aircraft which are used to treat diseases affecting the palms, as well as an excellent staff of 1,200 employee.

“Keeping the allocations the same is disastrous because we will have to dismiss most of the workers who work on daily wages”, said Mukhlab.

The Ministry of Agriculture began a widespread campaign to treat the palm groves near the areas that witnessed war and armed operations in the past.

The ministry announced the allocation of 2,500 donums [625 hectares] to plant palm groves for over 560 kinds of dates.

Iraq today has 11 million date palms and the ministry plans to increase to 30 million trees over the next ten years.

In the 1970s, Iraq’s 34 million date palms accounted for 30 percent of the total number found in the world. Official figures indicate that annual exports from Basra province alone reached more than 130,000 tons.

(Source: AKnews)

Payment for wheat exports to Iraq in the late 1980s will finally be distributed to growers in Australia, according to a report from Weekly Times Now.

Grain growers will share in about $48m in repayment of debt owed by Iraq relating to three wheat pools run by the former Australian Wheat Board, and affecting 52,000 growers.

Corporate advisory business Ferrier Hodgson has been pursuing repayment of the outstanding debt after the issue was referred to it by Agrium Inc. when it took over AWB Limited.

After the end of the first Gulf War in 1990 Iraq defaulted on $US480 million in wheat payments to the AWB. The Federal Government’s insurance arm, the Export Finance and Insurance Corporation, paid 80 per cent of the debt (about $US380 million) to the board in 1990, leaving $US99.2 million owed to growers.

In 2004, the Paris Club of nations waived some of Iraq’s debt, leaving about $US50 million owed to Australian growers.

The outstanding $US50 million will be paid by Iraq in annual instalments of about $3 million for the next 17 years, a repayment time frame determined by the Paris Club.

Food and goods prices in Baghdad are rising as the Arab summit approaches, reports AKnews.

A member of the Iraqi parliament’s finance committee said citizens have started to complain about the hike in prices, adding that the government should take action to stabilize market prices.

One resident told the news agency that  “rising food and goods prices have affected citizens badly”, while another said “prices of groceries have nearly doubled”.

The price of one kilogram of apples in Baghdad has shot up from 1,250 Iraqi dinars to 2,500.

The Arab summit is scheduled to be held in Baghdad on Thursday. Iraqi authorities have taken strict security measures and cut off several roads on the outskirts of Baghdad to tighten security.

(Source: AKnews)

Dow Jones reports that the Iraqi Grain Board bought 300,000 metric tons of Canadian wheat from a tender which closed on 13th March 13.

The head of the board, Hassan Ismail Ibrahim, told the agency that:

• 100,000 tons were bought from Jordan-registered Jresat at $361/ton cost and freight;
• 100,000 tons from Glencore International at $356/ton C&F;
• 50,000 tons from Louis Dreyfus at $361.22/ton; and,
• 50,000 tons from Archer Daniels Midland Co. (ADM) at $361/ton C&F.

Iraq also bought 400,000 tons of Canadian wheat in February, and is planning to issue new tender to buy wheat in April.

(Source: Dow Jones)

By Bob Nottelmann, crop production specialist with California Pacific Plant Exports (Cal Pacific) and Ekland Marketing of California (Emco).

My colleague, Roy Ekland and I worked as short term technical advisers for the USAID Agribusiness project (Inma) in Iraq. As a result of our work and Inma’s support, commercial strawberry production is now a lucrative option for Iraqi farmers and Iraq has become an important market for the plant materials we supply. Without the courage and initiative of the Inma staff, this industry would not exist. Although still in its infancy, this is a now a robust industry with a sustainable future.

Inma has a broad and positive influence on agribusiness in Iraq and I am concerned about the present status and future of the project after the troop withdrawal. In a recent correspondence with a USAID representative, we had the following exchange:

Now that the troops have left, what INMA projects are still operational?

USAID Agribusiness project (“Inma”) is fully operational.  There has been no change in operations as a consequence of U.S. troop withdrawal.  USAID-Inma continues to work with partners to strengthen sustainability and competitiveness of the agriculture private sector in Iraq. To achieve this objective USAID-Inma conducts the following activities:

• Establish linkages among USAID-Inma supported enterprises and between the enterprises and markets;
• Develop nurseries, consolidation centers and field-based learning centers;
• Support the development of domestic and export marketing strategies;
• Continue to develop enterprise management and technical capacity; and
• Deliver agricultural and business development services across Iraq.