Iraq bears high cost for wheat surplus

Published Oct 15, 2024

Tridge summary

The Iraqi government is facing a significant financial loss of approximately $500 million due to a generous wheat crop yielding a surplus of 1.5 million tons, a result of improved rainfall and subsidized farming practices. This surplus has led to Iraq becoming self-sufficient in wheat, requiring no imports for the past three years, and boasting strategic reserves of over 5.5 million tons, enough to satisfy the nation's demand for a year. The government's strategy to cultivate wheat in desert regions, using groundwater instead of depleting river water, has contributed to this self-sufficiency amidst Iraq's ongoing drought. However, the subsidized farming costs have resulted in a substantial financial loss for the government, highlighting the challenges of balancing agricultural production with financial sustainability.

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Original content

The Iraqi government is losing about $500 million as a result of a bountiful wheat crop and a massive grain surplus in the country, which is one of the major wheat importers in the Middle East. The surplus in Iraq’s wheat crop, which reached 1.5 million tons, is a result of better rainfall than anticipated and, more importantly, government funding. To stimulate the production of the essential grain amid often dry circumstances, the government gives farmers more than double the price on the global market. The Director of the General Company for Grain Trade, Haider Nouri, revealed last week that Iraq’s strategic reserves of wheat are currently over 5.5 million tons. Nouri explained that this large stock of wheat is sufficient for one year to meet local demand, underscoring that flour prices will not rise with any global crisis, according to the Iraqi News Agency (INA). In July, the state company responsible for purchasing grain in Iraq announced that it bought 6.3 million tons, the ...

Source: UkrAgroConsult