Iraq has cut its wheat imports from Australia by almost half, following Canberra's support for the US position on Iraq, and is reported to be seeking fresh supplies from France.

Iraq is one of Australia's biggest wheat customers, but threatened to reduce its order in July because Australia voiced support for the possible US attacks on Baghdad.

The Australian Wheat Board (AWB), the country's main wheat exporter, said Iraq had now reduced its order for 2003 by 44%.

The cut comes as Australian farmers suffer a severe drought which has cost them 5bn Australian dollars (�1.8bn; $2.8bn) in lost income and could halve this winter's grain harvest.

Threats upheld

The AWB said on Thursday that Iraq would buy 1m tonnes of wheat in 2003, compared with 1.8m in 2002.

But the trade ministry has played down the implications of the reduction and suggestions that Iraq is now looking to France.

Reports suggest Iraq is tendering for up to 500,000 tonnes of wheat from France, the first time it has shown interest in such levels.

A report in the French magazine Paris-Match suggested most French people wanted their country to remain neutral or oppose any attacks on Iraq.

Sticking to the positive

The AWB has refused to comment directly on the link between Baghdad's reduced wheat order and the Australian government's support for the US.

A spokesman for the trade ministry said securing even 1 million tonnes of wheat exports to Iraq in "a year of great instability" was a healthy achievement.

And the president of the Grains Council of Australia, Keith Perrrett, told the local ABC News Radio that Iraq's decision to buy grain from France was a non-political move.

"The French wheat is generally lower quality wheat and of a cheaper nature, and that's probably the reason Iraq is looking at that," said Mr Perrett.