Credit problems halt wool sales to Iran

Press, 17 November 1981, Page 32

Credit problems halt wool sales to Iran

PA Wellington Wool sales to Iran have slumped because of continuing problems, in arranging finance. Difficulties in getting letters of credit established are continuing to dampen sales in spite of the announcement last month of a new system for arranging finance. . LIran.'bought more than $69 million worth of wool in the season ended in June, making it New Zealand)* fifth biggest customer. -<But one big Wellington' woolbuyer says it has sold no wool to Iran since September. The trouble' over wool seems to’be)ghrt of a general foreignL-'excnange crisis in Iran. It owes the Meat Board about sso.million for lamb under this year's contract, and the boardTas stopped all remaining, shipments until it gets 'paid. '• ... Wool trading with Iran was suspended for about two weeks in October because of

difficulties in getting letters of credit established. In early November, the New Zealand Woolbuyers' Association gaid a new system of arranging finance had been put in place and Iran was able to start buying again. An association spokesman said that "some" sales had since taken place. ■' The number of sales appears to have been small) however.- Some buyers are still waiting for letters of credit to be established for deals which were floated three months ago. "We are not selling anything at this time." said another company. “We are still waiting for letters of credit for wool we are holding here. We will not put it on the water,until we get the letter of credit established: “But having to delay shipments is not unusual with Tram Sometimes we have had to delay them lor up to six .'months." '• Iranian importers are still

showing considerable interest in buying New Zealand wool. The importers had also said that the difficulties over finance should be resolved . soon, one buyer said It would be “too risky" for New Zealand buyers' to ship the wool and hope that the letters \ oi , credit .. came? through later, one industry source said. . Wbol- for which finance ; was" arranged before the present troubles is still being shipped. One buyer said that he-Jhad. had a letter of credit established as recently ,as three weeks ago. This, however. appears to be the exception. . Wool continues to be delivered safely in spile of tlie war between Iran and Iraq, one industry source said. It is usually either offloaded at Dubai and then transshipped in barges to the southern Iranian port of Bandar Abbas. or sent via Japan and the trans-Siberian railway to' northern Iran.