France pressed to finalise wheat sale to Iran
PARIS, July 29 (Reuters) - French grain traders and bankers have put
pressure on the French government to make available credit guarantees
so they can finalise recent contracts to sell French wheat to Iran , banking
sources said on Thursday.
Exporters earlier this month sold Iran at least 300,000 tonnes of French
wheat at $93 per tonne Fob, the contracts depending on obtaining credits
backed by French export credit insurer Coface.
Banking sources said it was imperative to act quickly so that exporters
could make shipping arrangements, and the sense of urgency among traders
and bankers coincided with the Clinton Administration's unveiling earlier
this week of rules allowing U.S. firms to export farm products to Iran
The rules followed the lifting in April of a U.S. ban on sales of food
and medicine to Iran , Libya and Sudan.
"There is right now strong pressure coming from bankers and grain
With the lifting of the U.S. embargo," a banker said, criticising
the French government for hesitating.
He said the government and Coface were observing the situation with
Iran and that no credit dossier to sell wheat to Iran had been approved.
Another source said he feared the government would "let the summer
pass" and evaluate in September the impact of the rally in crude
prices on the Iranian economy.
"September will be an important date for the Iranian government,
which hopes to see an improvement in its financial reserves," the
source said. A Coface official stressed that while it was evaluating matters
on a case-by-case basis, any decision on credits was up to the government.
A government source said there was a credit guarantee available under
Coface for Iran , but that the amount of the guarantee was very limited.
"We don't have enormous means," the source told Reuters, although
he refused to divulge the level.
Since 1996/97, Iran has avoided paying cash for its grain purchases
in favour of bank credit lines, and French banks had for some time been
wary of bankrolling Iran 's grain purchases because of financial problems
related to low petrol prices.
But banking sources said on Thursday the rally in oil prices that has
taken crude to a 20-month-high has given them more confidence in extending
credit lines to Tehran.