Iraqi grain production may not rebound in a similar pattern in MY 2020/21 as it did in MY 2019/20 due to a shortage of rainfall coupled with impact of the COVID-19 outbreak on Iraq’s oil-dependent economy and movement restrictions that limit the ability for farmers to cultivate their grain. Post expects less than average yields per unit area of wheat and barley due to late and insufficient rainfall in growing areas. However, an increase in planned planted area for wheat and barley may compensate for yield declines. Grain food and feed consumption are forecast to rise on population growth and growing demand for meat and dairy products fueling the Iraqi livestock sector.
Post estimates MY 2020/21 barley production to reach 1.675 MMT on increased planned cultivation areas to offset declined yields as the Iraqi government aims to keep barley production stable. Post is also raising MY 2019/20 barley production to 1.65 MMT and lowering MY 2018/19 production to 320 TMT based on new data.
Official data from Iraq’s Central Statistic Organization showed that barley production in MY 2019/20 was 1.65 MMT. Barley production in the rainfed area was 84 percent and the remaining production (16 percent) was produced in the irrigated area. This rise in production was due to farmers increased cultivation area compared to the previous year. Additionally, yields were higher that season as farmers were able to access subsidized seeds, fertilizers, and pesticides. According to MOA, the planned area for barley cultivation in MY 2020/21 is 1.375 million hectares, not including the KRG area which is an additional 160,239 hectares.
In MY 2018/19, barley production was 320 TMT, 37 percent less than the previous season. Outside of the KRG area, Al Qadissyia governorate ranked first producing 65 TMT (34 percent) of the total barley production followed by Al Muthana governorate producing 35 TMT (19 percent) and Missan governorate producing 26 TMT (14 percent).
Post forecasts MY 2020/21 total barley consumption to reach 1.685 MMT. Iraqis generally use barley as animal feed for sheep, goats, and beef and dairy cattle, which would compete directly with feed grade wheat. Some breads and other dishes for human consumption are produced with barley. However, barley in this case is mostly imported from Turkey and the volumes are low.
Iraq does not import substantial quantities of barley. The sector mostly consumes what it produces and farmers keep some seeds to plant the next season.
Conflicting media reports included an announcement from MOA stating that it is plans to export 1 MMT of barley this year, while the MOT indicated plans to import barley. However, Iraqi barley trade volumes are generally negligible. In 2018, Iraq imported 1,582 MT of barley, the bulk of which was imported from Turkey and the rest from the European Union, China and Iran.
Imported barley flour is mostly used for making bread for human consumption and not for animal feed due to the increased demand for barley bread for dietary reasons. Iraq bans barley imports annually during the local harvest, generally from mid-April until late July. The ban is lifted only after local production is exhausted.
Post estimates MY 2020/21 ending stocks to reach 21 TMT. This is down from 26 TMT in MY 2019/20.
As with wheat, the MOA subsidizes inputs to barley production. Farmers are able to purchase seeds at 70 percent of their value, fertilizers at half price, and pest spraying is often free. The ministry buys barley from farmers at a set procurement price of 420,000 dinars/MT ($352) which is the same price as third grade (feed grade) wheat. The barley is then distributed to livestock farmers through a number of state-owned firms.
Companies affiliated with the MOA purchase domestic barley from farmers. These firms then resell the grain to farmers and fisheries as feed at a reduced rate. Sheep and goat farmers are able to purchase up to eight kilograms of subsidized barley annually. Animal breeders may buy up to 30 tons of barley per season. Currently, farmers pay 278,500 dinars/MT ($234) for barley. Often farmers keep a large share of their barley production for feeding livestock throughout the year.
Plantation of yellow corn (zea maize) in Iraq takes place twice a year. Spring corn is planted from the first week of March until around March 20 in the South and Central Iraq but extends until the end of March in Northern Iraq. The spring corn harvest takes place from June until early July. Autumn corn planting takes place in the first half of July and harvested in the second half of November until the end of December.
Post estimates that Iraq’s MY 2020/21 corn production at 740 TMT on a planned planting area of 184,000 hectares. As a summer crop, corn is also very dependent on rainfall providing sufficient water for irrigation.
MY 2019/20 corn production of both the spring and autumn plantings was 473 TMT as a result of favorable weather conditions following drought in 2018. Spring corn production was very small due to late planting, amounting to only 0.1 percent of total corn production, while the autumn corn made up the bulk of production.
Before the drought conditions ended in fall 2018, the Iraqi Ministry of Water Resources had planned to prohibit corn cultivation due to water scarcity. However, due to the strategic importance of the crop, the government allowed farmers to cultivate corn using underground water especially in the governorates of Kirkuk and Saleh El Den. More than a third of Iraq’s yellow corn production comes from Babylon Governorate, south of Baghdad. Corn is not planted in Northern Iraq except in the Kirkuk Governorate. The Kirkuk Governorate is the second largest corn-producing governorate in Iraq.
Yellow corn production in Iraq has increased in the past years on both higher yields and a rise in planted area. The MOA has been promoting the higher yielding, hybrid corn variety, mostly imported by the private sector from the United States, with yields reportedly at 10 MT per hectare. Imported Turkish seeds cost 600,000-800,000 ID/MT ($504-627/MT) while some imported hybrid seeds, known for exceptionally high yields, may reach 1,000,000 ID/MT ($840/MT). The Iraqi government does not provide nor directly subsidize corn seeds, or seeds for other summer crops for its farmers.
Post expects MY 2020/21 total consumption to reach 720 TMT on growing feed demands of the domestic poultry and aquaculture sectors. Yellow corn in Iraq is mainly used by poultry feed mills but the use of corn by the aquaculture sector is also increasing. Traders supply most imported corn to feed mills. These suppliers generally price their product including freight and offer credit terms. Feed mills prefer imported corn, especially South American origin, due to the quality, moisture rate, and low occurrence of aflatoxins.
Post estimates MY 2020/21 corn imports will reach 60 TMT taking into consideration recent import trends, planned planted corn area and production and the difference with local demand. Iraq’s corn imports origins remain as it has historically – coming from Argentina, Romania, and Turkey. Turkey supplies almost exclusively northern Iraq via land routes.
The government of Iraq frequently bans corn imports from November until May. The ban is designed to prevent imported corn from being mixed with domestic harvest and sold to the Ministry of Agriculture at a profit. The Ministry of Agriculture normally purchases the local corn at a fixed price that is often above the international price and distributes the corn to Iraqi livestock farmers at a subsidized price. Occasionally, the government will put in place temporary bans to protect corn farmers from low prices driven by surplus product in the market. Feed mills maintain stocks of imported corn to mill during the import ban period.
Post estimates MY 2020/21 stocks to reach 128 TMT. Iraq has a limited capacity to provide good storage facilities and avoid aflatoxin.
During harvest season, farmers deliver their harvest as to ministry processing plants at a set announced price of 350,000 ID/MT ($290/MT). Drying facilities accept corn twice a year to match with the spring and autumn harvest dates. The MOA, through the Mesopotamia State Company for Seeds, then dries the corn harvest and prepares it as grain for distribution to poultry producers. The company has drying facilities spread throughout the country, however storage and processing facilities are not available in every governorate which hampers their ability to market corn.