India Fears Its Wheat Exports May Be Ambushed By War

US To Force Iraq to
Cultivate Genetically Engineered Wheat

ASHOK B SHARMA / The Financial Express (India) 6apr03

Commodity Watch

New Delhi—As the US-British troops approach Baghdad, Indian wheat exporters are becoming more and more pessimistic about the prospects of trade with Iraq. They apprehend that after the war, US ally Australia will emerge as the major exporter of wheat or the newly-developed genetically modified (GM) wheat will be grown in Iraq.

“Two vessels carrying 24,000 tonne of wheat to Iraq is still stranded in the Gulf waiting to reach the shore, while two others carrying 50,000 tonne of Australian wheat have been converted to aid and is being allowed to land,” said Mr Raj Kumar Jain of Priyanka Overseas.

Mr Jain said that out of the stranded consignment, 18,700 tonne belongs to Priyanka Overseas and 5,000 tonne to Vishal Exports. He said Priyanka Exports has also sent a vessel containing 13,750 tonne of sugar to Iraq which too is stranded. Exporters have also sent two vessels containing 18,000 tonne of sugar to Yemen.

Iraq imports about four million tonne of wheat per year. Last year, it imported 3.6 million tonne under the UN oil-for-food programme. Iraq also imports about 1.2 million tonne of rice, most of which is from Vietnam and Thailand. India is a small exporter of rice to Iraq. In February, the deadlock over wheat exports to Iraq was broken after Iraqi officials inspected the godowns of the Food Corporation of India and found the conditions satisfactory. “Priyanka Overseas then made a record export of 22,000 tonne of wheat to Iraq” said Mr Jain.

He said that Indian exporters have already booked orders for about six lakh tonne of wheat to Iraq. Exporters have, in fact, fixed a target of $ 1 billion for exports of all commodities to Iraq. The current situation, said Mr Jain, has not only disrupted exports to Iraq but has also blurred its prospects. He added: “We do not know for certain what sort of regime would emerge after the war. If the US and its allies succeed in over-running Iraq, the new regime will definitely be either directly or indirectly under their influence. The UN food-for-oil programme may not be there and some other form of reconstruction and rehabilitation is likely to take its place. In such a situation, either the US or Australia may emerge as the major supplier of wheat or Iraq may be forced to sow GM wheat to meet its domestic consumption needs.”

Mr Jain, however, does not expect the war to affect exports to other countries in West Asia.

He said that if the situation does not improve, exporters would be forced to sell their consignments at a discount to Yemen or other Gulf countries. He also said that exports to Iraq usually fetch $ 203 per tonne of wheat on cost, insurance, and freight (cif) basis as compared to $ 120 per tonne when exported to other destinations.

Mr Prem Garg of the export house, Shivnath Harinarayan, said that he has exported 13,750 tonne of rice to Iran, at $ 220 per tonne.

He said that there is no problem in exporting to Iran and other countries in the region. He said that his company exports rice to several African countries including Nigeria and Senegal.

Brig Anil Adlaka of Rice Exporters’ Association said that exporters are paying higher freight and insurance rates for consignments to West Asian countries due to the war. India exports about 3.5 lakh tonne of basmati rice to Saudi Arabia annually. A good quantity of basmati rice is also exported to Yemen.

source: http://www.financialexpress.com/fe_full_story.php?content_id=31715 7apr03