Deals of wheat for oil being mooted

Press, Volume CXV, Issue 33929, 23 August 1975, Page 15

Deals of wheat for oil being mooted

Z P A.-Reuter—Copyright > W \SHI.\GTO.\. August 22. American officials have revealed that the Ford Administration is seriousl\ considering possible exchanges of U.S. wheat for foreign oil — raising the prospect of huge barter deals with the Soviet Union and other countries.

Such arrangements could,l bring revolutionary changes; to United States trade policy and could have a major impact on world oil and grain! markets. No details of the talks were given yesterday by a State Department spokesman. Robert Funseth. who* said that the United States i, was considering possible i, swaps. But he declined to , reveal the names of the j countries involved. However, other U.S. . officials have said that the 1 , Ford Administration is inter- , ested in such a deal with the Soviet Union. A wheat-for-oil swap would ( have a number of advan- , tages for the Ford Adminis- • t ration since it might have the following results: Reduce criticism of grain sales to the Soviet Union since the United States would obtain, ' needed oil supplies in 1 return. Limit U.S. dependence on; ( the Organisation of Oil; Exporting Countries > < (0.P.E.C.) of which the Soviet Union is not a member. Make the Soviet Union a regular buyer of U.S. wheat rather than an erratic purchaser of huge 1 quantities, upsetting the stability of the grain market. Enhance the value of detente . with the Kremlin cur- 1 rently under attack in the United States. I

Boost Soviet-American trade/ currently at a low ebb after a Congressional demand that the Soviet Union give assurances of freer Jewish emigration in return for U.S. tariffs — and the Soviet refusal to do so. The Agriculture Secretary (Mr Earl Butz), speaking in Chicago last night, did not confirm or deny the State Department report. Asked to comment on the' .report, Mr Butz told a press conference that “it doesn’t: make sense to swap when it only takes half the amount of soybeans to buy a barrel of oil now that it took three years ago." Little chance He said that there seemed, little chance of such swaps because the oil-exporting nations were not big grain buyers. Any barter deal would have to surmount considerable obstacles. The main ones are that both the oil and grain trade in the United States are firmly in the hands of huge and powerfully-entrenched multi-national corporations which would object strongly to Government intervention. Any deal might have to include some, if not all. of these corporations and strike an acceptable balance between their intensely competitive interests.