BAGHDAD, July 22 (Reuters) - Iraq's Agriculture Ministry said on Saturday it expected to produce 250,000 tonnes of rice in the 2017 season.

The figure suggests gap to be filled by imports of about 1 million tonnes, as demand annually stands at between 1 million to 1.25 million tonnes, according to government sources.

"The expected production is around 250,000 tonnes for this year, the harvest should start in October and we hope the figure will be close to this," Agriculture Ministry spokesman Hamid al-Nayif told Reuters.

Around 200,000 dunums (20,000 hectares) have been planted with rice, Nayif said. The planted area varies from one year to the next according to water availability.

Iraq, a major rice importer, has been struggling to buy the grain from abroad this year after introducing new payment and quality terms that have kept traders away from its tenders.

Iraq's Trade Ministry is responsible for procuring strategic commodities, including rice, for the country's ration programme.

The rationing programme, created in 1991 to combat U.N. economic sanctions, includes flour, cooking oil, rice, sugar and baby milk formula. Impoverished Iraqis continue to depend on the system, which analysts say is corrupt and wasteful.

(Writing By Maha El Dahan; Editing by Edmund Blair) ((Maha.Dahan@thomsonreuters.com; + 9712 4082101; Reuters Messaging: maha.dahan.thomsonreuters.com@reuters.net))