Iran trade imbalance

Press, 11 December 1982, Page 16

Iran trade imbalance

Stuart McMillan)

New Zealand's efforts to even out its trade with Iran may bring it into conflict with the oil companies. The message that Mr Cooper, the Minister of Foreign Affairs and Overseas Trade, got while he was in Iran was that Ipan would look at New Zealand's imports from Iran in deciding whether to buy more meat and wool from New Zealand.

At the moment the figures hardly bear looking at. In the year to June, 1982, New Zealand sold goods worth $103.5 million to Iran; in the same year its imports from Iran amounted in value to $166,000. While he was in Iran. Mr Cooper said that there was a limit to how much caviar and how many carpets New Zealand could import from Iran.

The last time that the oil company BP, which has traditional links with Iran, brought Iranian oil into New Zealand was in January, 1980. The trade figures for that year show that New Zealand's, imports from Iran were. $50.6 million, still down markedly from the $77 million of the 1978 year. The only way that New Zealand can do something

substantial to make this year’s trade ratio of one to 623 lobk more presentable in future years is to buy more Iranian oil.

That is where the oil companies come in. New Zealand is totally dependent on the oil companies for its overseas supply of oil. The oil companies buy their oil according to the characteristics required by the customer, and according to price.

It seems improbable that the oil companies will take directions about where they buy their oil—unless, of course, the Government wants to pay a premium to cover special imports.

Iranian oil is generally expensive and the risks involved in getting oil out of' Iran include attacks from Iraqi aircraft. Much, of the oil leaving Iran is now exported in small Greek tankers. 'The major oil companies have been showing some reluctance to put oil tankers into Iran.

How will they take a request from the New Zealand Government, which is likely to happen, to seek more of their supplies from Iran? If they refuse it will be difficult for the New Zealand Government

to force them to buy from Iran. The Meat Board has already conducted. deals with Iran loosely known as oil-for-meat deals.

The more exact description of these deals is that, they are back-to-back deals, though this is hardly a stance that is calculated to inspire confidence. i

The system is that the Meat Board arranges with a European oil broker to buy the Iranian oil. The broker pays into a bank account. The Meat Board gets paid from that account. The. Iranian authorities have let New Zealand know that they would much rather have New Zealand consume the oil it buys. Will the oil companies be prepared to accommodate New Zealand in buying oil so that better trade figures with Iran show up in the statistics? The Government has no doubts that the Iranian market will be important for a long time. Mr Cooper has had it at. first hand that Iran will be looking hard to see whether New Zealand is trying to correct a balance of trade that is strongly in New Zealand’s favour.