New Delhi: The Iraq war is likely to have a major impact on India's wheat exports to West Asia and one of the vessels carrying around 18,000 tonnes to that country is already stranded in Dubai.

India has orders for export of six lakh tonne wheat to Iraq, which traders feel will be inordinately delayed.

"It is a wait and watch situation for us, wheat exports to West Asia will come to a standstill, my company sent a vessel containing 17,850 tonne wheat to Iraq last week and it is now held up in Dubai," Priyanka Overseas managing director R K Jain said.

He said the risk is such that sending the cargo further to the Um Qasr port in Iraq is not feasible and there is no option but to pay demurrage of $ 4,000 every day.

If the war is prolonged, the Iraq-bound wheat will have to be sold in nearby Yemen at discounted rates, he added.

A top official of an international trading firm said freight rates have already shot up by $ three to four per tonne and currency volatility could also affect grain trade.

He said grain values in the domestic markets of importing countries would move up and in the short term the trade is bullish. But its full advantage is unlikely to be passed on to the exporters.

This is because the higher freight rates will proportionately bring down the sellers margins, he added.

Moreover, he said if the war is prolonged, grains coming to West Asia from North America and Canada by the Atlantic route will be disrupted.

India, however, is not in a position to meet the region's demand due to its own logistical problems, he said.

PTI