WHEAT: WORLD MARKETS AND TRADE
United States Sells Wheat to Iraq: For the first time since 1998, U.S. wheat has been exported to Iraq. In early January 2004, 31,600 tons of HRW were shipped, as a Russian firm was unable to fulfill an Oil-for-Food contract. Furthermore, in March 2004, the World Food Program (WFP) accepted two wheat tenders totaling 895,000 tons for April/June shipment. The WFP awarded 325,000 tons to the United States, 460,000 tons to Australia, and 110,000 tons to Argentina. Beginning April 1, the Iraqi Ministry of Trade’s Grain Board (IGB) regained full procurement responsibility and recently issued a tender for 200,000 tons of wheat, which will close April 14.
Before the first Gulf War in 1991, the United States was the leading supplier of wheat to Iraq. Afterwards, other suppliers, most notably Australia, expanded their market share, especially when the Government of Iraq barred U.S. wheat in 1998.
Domestic: Increasing competition, the slowing export pace, and improving weather sent most wheat prices down during the first two weeks of March. By the third week of the month, however, large export sales--combined with concerns over dry weather in the HRW belt--launched prices into a period of recovery. At the end of March, strong demand and tight stocks pushed U.S. prices higher than a month ago.
For the week ending April 2, average HRW and SRW prices were $16 a ton and $13 a ton higher, respectively, than those in the first week of March. HRS prices jumped by $8 a ton while SWW ended the month with a gain of $11 a ton.
TRADE CHANGES IN 2003/2004
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