Setting three grades for the local wheat harvest, Iraq's state-run Grain Board set a price of $560,000 Iraqi dinars ($472) per tonne of "first grade quality" of locally produced wheat, while 480,000 Iraqi dinars($404) will be paid per tonne of second grade wheat crops.

The lowest quality grade of local wheat would be worth of 420,000 Iraqi dinars ($354) per tonne, said the statement.

The Board imports millions of tonnes of wheat and rice annually as millions of Iraqis depend on the government's extensive subsidised food system, which is managed by the trade ministry.

Iraq's new grain board chief said he expected local wheat production at no less than 2.5 million tonnes in the 2018 season, an improvement over previous forecasts on the back of recent rainfall.

Iraq needs an annual wheat supply of between 4.5 million and five million tonnes, implying an import gap of around two million tonnes for the year.