World Grain - September 2024 - 18

COUNTRY FOCUS
placement; reduced availability and increased cost of farming
inputs; physical damage to land, equipment and infrastructure;
disruption of markets; and increased cost and reduced
access to animal feed sources.
Iraq's economy is heavily reliant on oil - more than 90%
of the government's revenue comes from oil. Any drop in
prices or output could lead to serious economic instability.
Flour milling
Iraq has about 280 licensed flour mills with 3% belonging
to the private sector. The government is heavily involved in
the wheat value chain, and domestic production primarily is
fed into the Public Distribution System (PDS), a ration card
system that directly supplies food to middle and lower-income
families.
Much of the wheat flour distributed under the PDS ends up
either as animal or fish feed due to poor quality, or because
families cannot bake bread at home, according to the Foreign
Agricultural Service (FAS) of the US Department of Agriculture.
Most families in the urban areas purchase bread from
local bakeries. These bakeries use imported flour mostly from
Turkey or Iran, or purchase flour from families that are not
able to bake the bread at home.
Typically, a significant portion of the private sector milling
capacity remains underutilized because of a decline in the
frequency in which mills receive grain, the FAS said. Private
mills receive wheat after the public sector capacity is filled.
However, this August the government approved the sale of
wheat to licensed public and private mills at prices equivalent
to the import price of similar wheat, in a move to enhance local
flour production and reduce reliance on imports.
Also, as part of the National Product Protection Program,
the government imposed a gradually increasing customs tariff
on imported flour, starting at 10% from Sept. 1-Dec. 31 and
increasing to 25% from Jan. 1, 2025-June 30, 2025. It will
review the tariff after six months.
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In addition, the Ministry of Trade and its contracted companies
will work with commercial mills to supply flour to social
welfare beneficiaries under new contracts. Ministers including
defense, interior, trade, justice, labor and social affairs will
be supplied exclusively with locally produced flour.
A 30% customs duty will be imposed on imported packaged
flour (1 kg) starting Oct. 1.
This July, Prime Minister Mohammed S. Al-Sudani met
with several owners of private mills that have been producing
flour since April. He commended the millers for their contribution
to local production and creating jobs. He said that all
obstacles facing the mill owners will be removed to ensure
fair competition between local and imported products.
He added that " special " decisions will be issued to protect
their products if they cover half of the market's demand for
flour.
Iraq will continue to import flour in 2024-25 but the IGC
lowered its estimate to 1.5 million tonnes, down from 2.1 million
tonnes imported in 2023-24. Due to its higher quality,
most of the imports are bound for private bakeries and other
processors, the FAS said.
A significant amount of wheat flour is imported from Turkey
(about 100 mills produce only for the Iraqi market) and Iran
with a small amount from Jordan and Russia. Mills outside of
Iraq have the capability to make flour in specification to Iraqi
preference at a lower cost than Iraqi mills, the FAS said.
Crop production
Wheat imports also are expected to drop in 2024-25 as Iraq
increases domestic production, according to the IGC. Imports
are estimated at 2 million tonnes, down from 2.2 million
tonnes last season, and below the five-year average of 3.2 million
tonnes.
Wheat is a strategic crop in Iraq, accounting for 70% of
total cereal production in the country, the FAS said.
" The government invests considerable resources into doSeptember
2024 / World Grain / World-Grain.com
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World Grain - September 2024

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