Australian wheat to lose out in Iraqi market grab

December 25, 2005

The Australian Wheat Board (AWB), the primary economic authority for Australian wheat export is set to lose its long-standing trade contract with Iraq worth $270m/annum to United States exporters after a deal was struck with Iraqi Wheat Board for a majority share of the $500m wheat market.

Aggressive lobbying by United States trade diplomats used the imminent uncovering of AWB involvement in the Oil for Wheat incident as fodder in their recent negotiations. The AWB's previous arrangement saw the use of Alia, a Jordanian based transport corporation owned by the wealthy Al-Khawam family, to transport their wheat to Umm Qasr, a southern sea port in Iraq.

"There has been obvious corruption in procurement and there were illegal and illegitimate transfers of huge funds abroad, outside the control of the Iraqi state," said Iraq's finance minister, Ali Allawi.

The UN report headed by Paul Volcker (former Chairman of the United States Federal Reserve), released in October 2005, noted that the AWB was aware the Iraqi Government used Alia as a backdoor for obtaining $310m in kickbacks under the guise as 'transport costs' and adjusted their price for the wheat accordingly which was noticeably higher than their trading price with importers in other regions.

"Numerous aspects of the AWB-Alia relationship suggest that some employees of AWB were placed on notice of facts strongly suggesting that AWB's payments were in whole or part for the benefit of the government of Iraq." said Vockler.

Sheik Hussein al-Khawam head of the Shiite Al-Kahawam influential family business operation including Teebah, Alia, Al Huda International Trading Company recently assumed its control on the newly established Iraqi Airlines in alliance with the new Iraqi Government, has been under heavy scrutiny from some influential US political analysts, including Volcker and which accuse the family of corruption due to dealings with Saddam Hussien.

Background
Recently the AWB has scrutinised the United States Department of Agriculture (USDA) for suspending the AWB from participating in a USDA credit-export scheme.