Date: 4/30/1999

Published In: Reuters

Author/Reporter: By Doug Palmer

WASHINGTON, April 30 (Reuters) - A prediction that U.S.
grain shipments will be on their way to Iran within the next 60
days could be too optimistic because of possible delays due to
government rulemaking, a private analyst said on Friday.

Carole Brookins, chairman of World Perspectives, an agricultural
policy and analysis firm, noted the ``wheels of government'' often
turn slowly under the best of circumstances.

Even though President Bill Clinton has announced that sales of
food and medicine will now be allowed to Iran on a case-by-case
basis, ``I think it might be a little bit later than 60 days'' before
shipments begin, she said.

After Clinton's decision on Wednesday to exclude food, medicine
and medical equipment from U.S. unilateral sanctions, Niki
Trading Co. President Richard Bliss estimated the first U.S. grain
shipments could be on their way to Iran in 60 days.

Niki, a Washington, D.C.-based agricultural broker, has been in
the limelight on the sanctions issue because last year it secured
an order from the Government Trading Corp. of Iran for the
purchase of 3.55 million metric tons of U.S. grains, soybeans and
sugar.

It was in the context of considering Niki's application for a
sanctions waiver to make that sale to Iran that Clinton decided to
exclude food, medicine and medical equipment from U.S.
unilateral sanctions.

However, such sales to Iran, Libya and Sudan -- the three
countries directly affected by the decision -- will still have to be
approved on a case-by-case under a new set of rules not yet
issued by the Clinton administration.

``It's going to take at least 30 days to get the regs written, maybe
45,'' Brookins said at a meeting on the potential for U.S.
agricultural trade with Iran, which was planned even before the
Clinton administration made its announcement.

After the rules are issued, each potential sale will have to be
examined by the relevant Clinton administration officials to see
that it conforms with the written guidelines.

Brookins said she expected a quick turnaround on those reviews,
but they could still take a week.

Bliss, who spoke at the same conference, acknowledged that the
timing of the first shipments will depend on how quickly the new
rules are written. But Niki, and other companies, can use the
intervening time to work out other details so sales can proceed as
soon as the new rules are in place, he said.

Brookins predicted that U.S. competitors such as Australia and
Canada would use the time the Clinton administration spends
writing its rules to try to make sales to Iran.

But it could be in Iran's interest to wait until the U.S. rules are
written before making purchases, she said.

From a buyer's point of view, Iran is likely to get a better price if
there are more suppliers offering wheat and other goods,
Brookins said.

The Government Trading Corp. of Iran's order with Niki included
2 million metric tons of wheat, rekindling memories of the years
before the 1979 Iranian revolution, when the United States
supplied 70 percent of Iranian wheat imports.

Jack Eberspacher, chief executive officer of the National
Association of Wheat Growers, said he was disappointed that the
Clinton administration's announcement this week didn't provide
more of a boost to U.S. wheat prices.

Because of some industry skepticism over whether sales will be
made, ``I think it will take physical shipments of wheat to Iran'' to
produce a price impact, he said.

On Friday, wheat for July delivery on the Chicago Board of
Trade rose 2-1/2 cents to $2.66 per bushel.

Although no U.S. government export subsidies or credits will be
allowed in the deal, Iran is free to arrange its own financing. Bliss
said he was been contacted by several European banks
interested in providing loans for the deal.

The Government Trading Corp. of Iran has given Niki detailed
purchase specifications, particularly for wheat, as part of its
order, Bliss said. In turn, Niki has shared those ``specs'' with
major U.S. grain exporters, who say the order probably will have
to be filled by ``blending'' white wheat from the Pacific
Northwest with red wheat from the Midwest, Bliss said.

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