India's deals to supply about 600,000 tonne of wheat to Iraq could be in jeopardy after the United States and Britain launched an attack on Baghdad, traders said on Thursday.

Several Indian firms won contracts in 2001 to supply wheat to Iraq under the UN oil-for-food programme, but the country has rejected Indian cargoes until now, saying the quality of grain was unsatisfactory.

India overcame the objections by setting up cleaning facilities at some of its ports to remove grain impurities.

"The first casualty of the war would be India's pending deals to supply 600,000 tonne of wheat to Iraq," said an exporter.

"With a big question mark hanging over the future of the UN and a US-backed dispensation expected to take charge in Iraq after the war, there is little hope these deals would be honoured."

A New Delhi-based firm, Priyanka Overseas Ltd, discharged its 22,000-tonne cargo at Umm Qasar port in February, after the Iraqi Grain Board issued a letter approving the wheat quality. It was the first successful wheat delivery to Iraq since 2001.

"We have held back the second vessel with 17,850 tonne of wheat at Dubai. We will send it once the war stops," R K Jain, managing director of Priyanka Overseas Ltd, told Reuters. The firm has contracts to supply 90,000 tonne of wheat to Iraq.

Another exporter said his cargo of 4,000 tonne of wheat was anchored in midwaters off Dubai port. Traders said both shipments were held back early this week after wear fears grew.

The impact of the war would be limited if the conflict was brief, traders said.

"If it's going to be a short and swift war, then the impact on commodity trade would be minimal," said Atul Chaturvedi, president of Adani Exports Ltd. "But if it's a prolonged one, trade, both in-bound and out-bound, could be affected."

He said the immediate fallout would be a rise in domestic edible oil prices, since freight rates were bound to increase.

India, the world's largest edible oil importer, buys palm oils from Malaysia and Indonesia and soft oils from Argentina, Brazil and the United States.

India, a major exporter of wheat, rice and sugar, does not have too many deals to supply to countries in the Middle East, traders said.

The country ships an average of about 100,000 to 150,000 tonne of wheat and about 25,000 tonne of sugar to the Middle East every month, traders say.