Iraq has signed an agreement with the United States to import wheat and rice, Iraq's trade minister said on Thursday.

The minister said during the signing ceremony in Baghdad that the agreement covers the first half of next year.

Yesterday, European traders said the Commerce Department had bought 50,000 tons of wheat for import from the United States in a global tender closed last week.

The wheat was purchased from ADM Trading Company at a price of $ 320.31 per tonne, which includes the cost of shipping without unloading.

The purchase was widely expected, because wheat was offered at the lowest bid price on December 3.

Iraq had previously said it wanted to import wheat from Russia as well.

Iraq, which traditionally relies on US imports, needs an annual wheat supply of between 4.5 million and 5 million tonnes and has an import gap of around 2 million tonnes a year.

The country spends billions of dollars a year on a program under Saddam Hussein to provide bread and other commodities at subsidized prices.

The General Grain Trading Company imports wheat mainly from the United States, Australia and Canada.