Last year Iraq became the largest customer of US wheat ahead of Nigeria.
Iraq has bought 200,000 of Russian hard milling wheat at around $300 per tonne on free on board (FOB) terms from international commodity trader Glencore, in a growing shift since the summer to European wheat and away from US imports, trade sources said on Wednesday.
The purchases follow a tender for a nominal 50,000 tonnes from any origin that closed on Sept. 21 but remained valid until Sept. 25.
Volumes in Iraqi wheat and rice tenders are viewed as nominal since it regularly buys more than originally sought.
The purchase is the second large sale of Russian wheat since July when Iraq began to shift to European wheat for the first time in over a year, mainly driven by more competitive prices than US wheat.
Traders say the sale reflected a more commercially driven management by Iraq's grain board seeking to diversify supplies from more expensive US wheat that had dominated purchases in recent years.
Iraq has also stepped up purchases of Australian wheat this year. Australia was Iraq's main supplier of wheat before the downfall of Saddam Hussein's regime.
"The Iraqis are clearly shifting to Russian and other origin wheat purely on the basis of price... and US hard red winter wheat is losing out," one trader said.
US wheat at FOB prices are at least $20 per tonne more than European wheat in addition to freight costs delivered to Iraq's main Umm Qasr port that add at least another $100 extra per tonne, traders said.
The trend towards European wheat could pave the way for greater flexibility in future purchases by Iraq.
Iraq has been one of the largest importers of US wheat, with yearly wheat import requirements of nearly 3 million tonnes and rice at around 1 million tonnes.
Iraq became the largest buyer of US hard red winter wheat last year ahead of Nigeria.
Iraq has not bought any consignment of US wheat since a large purchase of over 400,000 tonnes of hard red winter wheat in May.
After several months delay following massive purchases that topped over 2.8 million tonnes up to May, the grain board began purchasing European origin wheat in July.
The shift fuelled speculation by some traders who said Iraq's latest purchase signalled a move to replace with European wheat what they claimed were largely politically motivated US purchases.
But Iraqi trade officials contacted by newswire Reuters said "purely commercial considerations" dictated the latest sale of competitively priced Black Sea and European Union origin wheat.
Tight budgetary considerations also acted as a major impetus to become even more "price conscious" in the latest purchase in which Iraq received bids by international suppliers for Canadian, Australian in addition to US wheat, said one Iraqi trade official. (Reuters)