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Helping a trade partner purchase U.S. wheat

Helping a trade partner purchase U.S. wheat

U.S. senators are asking for the use of the Export-Import Bank to help Iraq buy American wheat

By Diego Flammini
Staff Writer

A group of U.S. lawmakers are asking a colleague to use a federal export credit agency to help another country purchase U.S. wheat.

Five Republican Senators (Roger Marshall-Kan., John Boozman-Ark., Jerry Moran-Kan., John Cornyn-Texas and James Inhofe-Okla.) sent a letter to Matthew Tueller, the U.S. ambassador to Iraq, asking for his assistance to ensure Iraq can continue importing American wheat.

“The U.S. is generally the largest exporter of wheat to this market and a natural partner to supply wheat to Iraq in times of need,” the Aug. 23 letter says.

Specifically, the senators are calling on Ambassador Tueller to use the Export-Import Bank (EXIM) to keep U.S. wheat flowing into Iraq.

Franklin D. Roosevelt founded the EXIM in 1934.

The bank “assists in financing and facilitating U.S. exports of goods and services,” its website says.

And in Aug. 2020, EXIM’s board of directors voted to establish a $450 million export credit guarantee for wheat and rice sales to Iraq.

Iraqi farmers may not harvest enough wheat to feed the population.

Local producers are expected to harvest around 4.5 million tonnes of wheat in 2021. This represents a decline from the 6.2 million tonnes of wheat farmers harvested in 2020, the Food and Agriculture Organization of the United Nations says.

The small wheat harvest is only part of the problem.

“The current wheat situation in Iraq is troublesome,” the senators wrote to Ambassador Tueller. “Due to smaller than expected harvests, and subsequent lower than expected government procurement of local wheat, Iraq will need to import a substantial volume of wheat to continue to operate their primary subsidized feeding program, the Public Distribution System.”

Iraq is not a large purchaser of U.S. wheat.

In marketing year 2019/20, for example Iraq imported 262,166 million metric tons of wheat but purchased no wheat the following marketing year.

“Iraq is a “swing” market for U.S. wheat, primarily hard red winter wheat,” Steve Mercer, vice president of communications with the U.S. Wheat Associates, told in an email. “Some years when its harvest is good, no U.S. wheat is imported.”

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