A vessel carrying 22,000 tonnes of Indian wheat sailed for Iraq early this week, nearly 20 months after Baghdad rejected consignments from the subcontinent over quality concerns, traders said on Thursday.

The vessel, M V Noor, loaded by New Delhi-based Priyanka Overseas Ltd, sailed from the west coast port of Kandla on Tuesday and would reach Iraqi shores in the next five or six days, trade sources said.

Iraq, which rejected Indian wheat over quality concerns in May 2001, gave its go-ahead to resume buying after a delegation from the Grain Board of Iraq inspected cleaning facilities at Kandla last week.

"Priyanka's consignment is expected to be unloaded by the end of the first week of February. The entire trade is holding its breath to know the fate of the consignment," a trader said.

The acceptance of the Indian cargo would encourage other trading firms to begin exports to Iraq, traders said.

Several Indian firms won contracts in 2001 to supply 600,000 tonnes of wheat to Iraq under the UN oil-for-food programme.

But Iraq rejected the Indian cargoes, saying the grain did not meet quality standards. Later, Indian firms set up cleaning facilities at some ports to get rid of grain impurities.

Traders say Iraq is facing supply problems due to low output in drought-hit Australia, a key wheat exporter to Baghdad.

"Iraq is certain to accept our wheat as it does not have many choices. If there is a US-led attack on Iraq that will further open up the Iraqi market for Indians," another trader said.

Traders said the Grain Board of Iraq had agreed to extend the validity of the letters of credit issued to Indian firms till the end of March.

But transport bottlenecks and unclear government policies are likely to limit shipment of any significant quantity of wheat to Iraq, they added.

Many Indian wheat exporters face defaults on sales contracts as the government has stopped issuing low quality, "lustre lost" wheat pending an assessment of stocks.