Iraq: Moving Towards Self-Sufficiency in Flour and Wheat Production

Date: September 24, 2024, Author: Susan Reidy

Baghdad, Iraq — Traditionally a major importer of wheat flour, Iraq is striving to increase its local production and reduce reliance on imports.

The government has approved the local sale of wheat to public and private mills at prices equivalent to the import price and has imposed a gradually increasing customs tariff on imported flour.

According to the International Grains Council (IGC), flour imports in 2024-25 are expected to reach a decade low. However, Iraq is set to remain the world’s second-largest importer of flour. Wheat imports are also predicted to decline due to increased domestic production.

Agriculture is a significant part of Iraq’s economy, accounting for about 10% of gross domestic product and employing 8.4% of the workforce. Approximately 22% of the country’s land area is suitable for agricultural production, but only 5 million hectares are cultivated.

Crop production is the main source of income for farmers, providing about 75% of their earnings. Key crops include barley, wheat, rice, and corn (maize).

Years of war and social unrest have caused severe constraints across the agricultural value chain.

Iraq’s economy is heavily reliant on oil, with more than 90% of government revenue coming from oil. Any drop in prices or output could lead to 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 feeds into the Public Distribution System (PDS).

Much of the wheat flour distributed under the PDS is used as animal or fish feed due to poor quality or because families cannot bake bread at home.

Typically, a significant portion of the milling capacity in the private sector remains underutilized due to the decline in the frequency with which mills receive grain.

However, in August, the government approved the sale of wheat to public and private mills at prices equivalent to the import price of similar wheat.

Additionally, as part of the National Product Protection Program, the government has imposed a gradually increasing customs tariff on imported flour.

This month, Prime Minister Mohammed S. Al-Sudani met with several owners of private mills that have been producing flour since April and praised them for their contribution to local production and job creation.

Iraq will continue to import flour in 2024-25, but the estimate for imports has been reduced to 1.5 million tonnes.

Crop Production

Wheat imports are also expected to decline in 2024-25.

Wheat is a strategic crop in Iraq, accounting for 70% of the country’s total cereal production.

The government allocates significant resources to domestic production.

Wheat production is expected to reach 6.3 million tonnes in 2024-25, up from 5.2 million tonnes in 2023-24.

Barley production is estimated to reach 1.4 million tonnes in 2024-25, a significant increase from 200,000 tonnes in the previous season.

Barley trade is typically handled by the private sector.

Corn production is expected to reach 500,000 tonnes in 2024-25, representing a 7% increase from the 450,000 tonnes produced in the last season.

Reference: www.world-grain-focus-on-iraq