Iraq set to pay high price for bumper wheat harvest

Published 2024년 10월 14일

Tridge summary

Iraq is facing a significant challenge after experiencing a bumper harvest and creating a surplus of 1.5 million metric tons of wheat, thanks to favorable rainfall and generous government subsidies. This surplus, which is expected to result in a government loss of approximately $458.37 million, is welcomed by farmers but poses a dilemma for a government already strained by climate change impacts on agriculture, conflict disruptions, and reduced oil prices. The government's strategy of paying farmers more than the global market rate to encourage wheat cultivation in arid conditions has led to the need for a large subsidy budget, which is putting pressure on the government's financial resources. Furthermore, the decision to retain the surplus wheat within the country to support local millers could lead to negotiations for lower selling prices, given that millers may be able to import wheat at lower costs. This situation highlights the need for the government to strike a balance between supporting farmers and managing its financial resources efficiently to ensure food security and economic sustainability.

Disclaimer:The above summary was generated by Tridge's proprietary AI model for informational purposes.

Original content

A bumper harvest and a hefty grain surplus in Iraq, typically one of the Middle East’s biggest wheat importers, has left the government with the prospect of a net loss of nearly half a billion dollars, according to Reuters calculations. The 1.5 million metric ton wheat surplus, helped by better than expected rains but above all by government subsidies, is excellent news for farmers. For the government, however, which pays them more than double the global market price to encourage cultivation of the food staple in often arid conditions, the price is high. According to the calculations, based on official figures and conversations with more than 10 government officials, farmers, mill owners, analysts and exporters, the government will have made a loss of $458.37 million, once it has paid the farmers and assuming it manages to sell the excess to private millers in Iraq at an agreed price. Critics say it needs to better balance the challenges of motivating farmers and limited financial ...

Source: Hellenic Shipping News