THE PRESS TUESDAY, APRIL 20, 1982. Better not to barter, but...

Press, 20 April 1982, Page 20

THE PRESS TUESDAY, APRIL 20, 1982. Better not to barter, but...

Under any but the most exceptional circumstances it would be far better to avoid concluding a deal with Iran under which the Meat Board barters lamb for oil from Iran. The .circumstances under which New Zealand finds itself are exceptional: at least 70,000 tonnes of lamb are available for the Iranian market, and Iran is apparently ready to take the lamb only if the Meat Board takes oil and not dollars in payment. .The negotiations that have been held in Teheran apparently have reached a point of deciding what is a fair price for oil — at the moment and in the future.

The Meat Board is as well equipped as anybody in the world to make a reasonable guess about the present value and future value of lamb in the world; it is by no means well'equipped to make judgments about the price of oil tomorrow or the day after tomorrow. All it can do, is to seek expert advice oh the subject, though advice that is truly expert has to be qualified by a large number of imponderables that could upset any calculations.

Given the difficulties, the Meat Board -seems to be taking the line of least risk: it appears to be seeking to have a buyer for the oil ready so that it will not be left with vast quantities of oil which it would need to store or transport while the international price fluctuates. A few million barrels of oil on which the price dropped by a dollar or two on each barrel would make the finances of the Meat

Board appear shaky .indeed. The Meat Board has enough on its plate by taking over the marketing of the rest of the lamb kill for the season without indulging in other high-risk ventures. If there is a buyer ready and willing to take the oil, it is perplexing that Iran does not sell the oil directly to that' buyer and pay for the New Zealand meat with the money it makes from that deal. The Iranians may hope that they can squeeze a better deal out of the board than they could get in the usual market for oil. They want to stick to the O.P.E.C. price; the market does not. Presumably the Meat Board will take into account possible political repercussions from the sale of the oil to someone out of favour with Iran. That is one — just one — of the messy aspects of getting into the business of bartering lamb for oil. The precedent that would be set by buying and then reselling the oil at a discount, to ensure the meat sale is another catch. In the end, the meat deal will depend upon what price the Iranians will pay and their determination to stick to a fixed price for the sake of appearances. If the board has to sell at a discount, it should at least know in advance what the discount will be. Only then, will the board know whether New Zealand is going to get a satisfactory return on the meat. Both sides are in a bind and the bargaining should be about even. Neither oil nor lamb is easy to sell at present. .