SYDNEY (Reuters) - A wheat war between Australia and the United States has threatened a political rift between the two allies after dramatic allegations of kickbacks to the regime of Saddam Hussein by Australia's monopoly wheat exporter, AWB Ltd.
The Australia-U.S. alliance, strengthened during the 2003 military invasion of Iraq, is showing cracks as the world's two biggest wheat exporters slug it out over Iraq -- one of the world's largest markets for the grain.
A 2005 U.N. report into the now-defunct oil-for-food programme has accused the AWB, the main exporter of food to Iraq in the 1990s, of paying up to $222 million to Saddam's government under the program.
A government inquiry now underway into whether the AWB broke Australian laws in its Iraq wheat deals has uncovered AWB documents showing wheat contracts were inflated with "trucking and service fees" which went to the Iraq regime.
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