The Australian Wheat Board (AWB) has been struck another blow as it attempts to weather the highly publicised inquiry into allegations that it made illegal payments to Saddam Hussein’s regime and retain its monopoly control of Australian wheat exports.

The Iraq Grain Board has suspended all dealings with the AWB until the inquiry, headed by former judge Terence Cole, is completed. Cole’s report is due to be passed to the government on 31 March.

The AWB currently enjoys monopoly control over Australian wheat exports, but this has come under increasing pressure.

A lobby group made up of potential AWB rivals such as global commodity traders Cargill, Louis Dreyfus and Bunge, said the Iraq Grain Board ruling should encourage the Australian government to deregulate wheat export, the Dow Jones newswire reported. Additionally, the AWB monopoly has long been a thorn in the side of trade negotiations with the US.

“This news highlighted the plight, and risks, that wheat growers face, in having to deal with only one exporter to market their wheat,” said Alick Osborne, the director of The Australian Grain Exporters Association, commenting on Iraq’s decision.

Iraq, a major export market for wheat, is due to buy as much as 1m metric tonnes of wheat, but the supplier is yet to be announced.