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Iraq starts distributing food from U.N. oil-for-food program

April 3, 1997

BAGHDAD, Iraq (AP) _ Iraq has started distributing the first food bought under an exemption to international sanctions, selling its hungry people bigger rations of badly needed flour.

The first 41,050-ton wheat shipment failed to trigger expected reductions in overall food prices, however _ disappointing Iraqis’ hopes that the U.N. oil-for-food program would bring general relief from chronic food shortages.

``We thought that once these food items started arriving, a big fall in prices would take place,″ civil servant Mohammed Jabar said. ``But it did not happen and we’re still waiting.″

The first flour was distributed under the program Wednesday, two days after the ship carrying the wheat docked in the port of Umm Qasr on the Gulf, said Steffan de Mistura, a U.N. humanitarian official.

Wheat is vital in Iraq, where bread makes up much of the diet. Iraq had said that with the arrival of the first wheat, it would increase the monthly flour ration from 15.4 pounds to 19.8 pounds per person.

Iraq has been under international sanctions since the country’s 1990 invasion of neighboring Kuwait. The United Nations says it will not lift the sanctions entirely until Iraq eliminates its weapons of mass destruction, which include stockpiles of nerve gas.

The chief U.N. weapons inspector flew to Baghdad on Thursday to press Iraq for details on its weapons programs. Rolf Ekeus has repeatedly accused Iraq of misleading his weapons inspectors and of hiding information on past weapons programs.

But with Iraqis suffering deeply under the sanctions, the United Nations for the first time is allowing Iraq to sell up to $2 billion in oil for an initial six-month period to buy food and medicine.

It had been predicted that the Iraqi dinar’s value would jump against the dollar once food distribution began, but on Thursday the dinar showed a slight loss from two days earlier, trading at 1,220 to the dollar compared to 1,150 on Tuesday.

Fuad Hameed, a money trader, said that was because the government decided to increase rations only for flour, not for other food items distributed as government aid.

Iraqi officials have said they cannot raise rations for any item until sufficient commodities have arrived to ensure steady distribution.

Currently, 2.2 pounds of flour sells for less than a cent when distributed under the government-subsidized ration system, but for 40 cents on the open market _ about one-tenth of the average government employee’s monthly salary.

Enough flour is expected to arrive in the next three weeks to provide a two-month supply for the whole country, said Eric Falt, the spokesman for U.N. observers overseeing the distribution of food.