7th APRIL 2015 - Vol.XXXVIII No.018
Business News

Iraq plans to purchase 50,000 tonnes of wheat

HAMBURG: Iraq's state grain board has issued a tender to buy 50,000 tonnes of hard wheat from the US or Canada, European and US traders said.

The volume was said to be nominal and subject to negotiation. It would be for April to May shipment, the same as in a previous tender for 100,000 tonnes Iraq issued on February 16.

Bidding deadline in the new tender was April 10, traders said.

"They generally name a tonnage they want in the tender and then start long talks," one trader said. "The bidding deadline will be the signal for the start of bidding rather than the end."

But the close deadline was seen as a sign the country has a requirement for nearby shipment. "They have issued a new tender requesting bids for C&F (cost and freight) shipments, but I do not think that people will want to bid aggressively on C&F terms," one trader said.

Iraq has previously concentrated on FOB (free on board) purchases. Ocean shipping costs for grain are currently rising rapidly. Baltic Exchange dry bulk carrier charter rates have risen by over 30 per cent since late last year.

Putting the burden on the seller to organise ocean shipments would also create major commercial risk as Iraq is in a virtual state of war, traders said.

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