South Sudan hunts missing grain in suspected graft probe

* South Sudan probes missing grain deliveries

* Could be mismanagement or corruption, minister says

By Skye Wheeler

JUBA, Sudan, Oct 27 (Reuters) - South Sudan's finance minister said he was trying to track down hundreds of millions of dollars worth of missing grain deliveries, at the heart of what could be a massive case of mismanagement or corruption.

The news comes at a sensitive time for the under-developed region, where the United Nations has appealed for food aid, warning 1.2 million people may face severe hunger this year following poor rains.

It will also raise questions about financial controls in the oil-producing territory, ahead of national elections due in April 2010 and a referendum on whether south Sudan should split off as an independent country in 2011.

Finance minister David Deng Athorbei said an investigation had found his predecessor at the ministry had issued hundreds of grain contracts worth a total of 6.2 billion Sudanese pounds ($2.7 billion) in 2008.

The discovery had come as a surprise, said Athorbei, because the former minister had not informed the south's parliament about the size of the planned purchases -- and because south Sudan did not have nearly enough money to honour the agreements.