Iraq Wheat Farmers May Slash Plantings as Turks Fill New Dam

(Bloomberg) -- Wheat farmers in Iraq, the Middle East’s second-biggest buyer of the grain, may have to sharply reduce plantings for next season’s crop as neighboring Turkey diverts water from the Tigris River for its largest hydroelectric project.

The area planted for Iraq’s 2018-19 wheat crop may drop by as much as 50 percent, Hameed Al-Nayef, the agriculture ministry’s spokesman, said. Iraq will “of course” need to increase imports as a result, Mahdi Al-Qaisi, deputy agriculture minister, said. The U.S. Department of Agriculture forecasts a decline in imports for the 2018-19 season.

Turkey’s Ilisu dam project on the Tigris has already led Iraq’s government to halt plantings of rice and corn for the season starting in July, as both rely on large quantities of irrigated water, according to Al-Nayef. The hydropower dam, in the works for more than two decades, was to start filling with water this month, Turkey’s state-run Anadolu Agency reported.

The Turkish dam compounds the water woes in Iraq, a mostly arid country where the Tigris -- with its headwaters in Turkey -- and Euphrates rivers supply much of the fresh water used in farming. Drought and infrequent rain make the Persian Gulf region one of the most water-stressed in the world. Iraq, the biggest wheat importer in the Middle East after Egypt, tendered Sunday to buy 50,000 tons of wheat from the U.S., Canada and Australia.

“Next season will be affected as the filling of the Ilisu dam will start,” Al-Qaisi, the deputy agriculture minister, said by phone in Baghdad. “We expect the planting plan will be affected. I can’t say by how much it will be decreased, but logically it will decrease.”

Corn Imports

Iraq may have to resume importing corn next year, the ministry’s spokesman Al-Nayef said. The country currently has reserves of about 100,000 tons, enough for about a year. Iraq’s Water Resources Ministry didn’t allocate sufficient water for all crops, so the agriculture ministry had to halt plantings of rice, yellow and white corn, sesame and sunflower seeds, and cotton, Al-Nayef said.

Corn futures have climbed 3.5 percent this year in Chicago, and wheat is up 16 percent. Russia, the world’s largest wheat exporter, is forecast to have a smaller crop for the first time in six years.

Iraq planted 4 million dunams (988,421 acres) of wheat in 2017-18, Al-Nayef said. Inadequate rain will probably leave the crop smaller than a year earlier, he said. Iraq started the wheat-harvest season on April 15 and should finish by late July or early August, according to Amer Abdul Aziz, spokesman for Iraq’s Grain Board.

The USDA estimates that Iraq’s wheat harvest in 2018-19 will be little changed at 4 million tons, while imports will decline to 3.6 million tons from 4.1 million tons. Iraq’s stockpiles at the beginning of the season will grow to 1.3 million tons from 881,000 tons, reducing the need for imports, according to the USDA.

--With assistance from Selcan Hacaoglu.

To contact the reporter on this story: Khalid Al-Ansary in Baghdad at kalansary@bloomberg.net

To contact the editors responsible for this story: Bruce Stanley at bstanley5@bloomberg.net, Claudia Carpenter

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