THE SUEZ CANAL CLOSURE AND INDIAN FOOD GRAIN SUPPLIES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP79T00826A002200100001-0
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 7
• Document Creation Date: December 12, 2016
• Document Release Date: May 13, 2002
• Sequence Number: 1
• Publication Date: June 23, 1967
• Content Type: IM

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Confidential
DIRECTORATE OF
INTELLIGENCE
Intelligence Memorandum
THE SUEZ CANAL CLOSURE AND INDIAN FOODGRAIN SUPPLIES
Confidential
23
23 June 1967
No. 1252/67
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WARNING
This document contains information affecting the national
defense of the United States, within the meaning of Title
18, sections 793 and 794, of the US Code, as amended.
Its transmission or revelation of its contents to or re-
ceipt by an unauthorized person is prohibited by law.
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CENTRAL INTELLIGENCE AGENCY
Directorate of Intelligence
23 June 1967
The Suez Canal Closure
and Indian Foodgrain Supplies
1. India's food supplies will probably not
be much affected by the closure of the Suez Canal.
Sizable US and Canadian grain shipments from West
Coast ports, and 75,000 tons of wheat on the way
from Australia ensure continued supplies during
the time ships are delayed by the need to transit
Africa. In recent months almost one third of US
grain shipments to India and one half of Canadian
shipments have been from West Coast ports. It
is estimated that 334,000 tons of foodgrain will
be delayed by 10 to 18 days by the closure meas-
ured from 5 June.
2. The journey to India from American East
or Gulf Coast ports via Suez normally takes from
30 to 35 days. The added transit time around the
Cape of Good Hope for ships now leaving will aver-
age about seven days. Grain ships are now expe-
riencing berthing delays in Indian ports, and ships
en route or soon to depart for India will be ar-
riving during the Indian monsoon when there will
be additional delays. In effect, therefore, the
longer transit time via Africa may simply shorten
the unloading delays at India's ports.
Note: This memorandum was produced solely by CIA.
It was prepared by the Office of Research and Re-
ports and coordinated with the Office of Current
Intelligence.
CONFIDENTIAL
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3. The principal effect of the closure of
the Suez Canal on India's food supplies will be
substantially increased freight costs. In 1966
India paid about $100 million in freight costs to
import foodgrain. About 80 percent of India's
foodgrain comes from the US and the balance prin-
cipally from Canada, Australia, and Burma. India
has normally paid the foreign flag rate of from
$7 to $14 per ton on foodgrain imported from the
US (the US requires that 50 percent of its grain
be shipped to India on US flagships which charge
$29 to $32 per ton, but the US subsidizes the
higher freight cost). Since the closure of the
Suez Canal, freight rates have increased about
$4 per ton from East and Gulf Coast ports and $2
to $3 per ton from the West Coast. Because a
shortage of ships is anticipated, these rates prob-
ably will increase further. These increased costs
would have added some $25 million to India's
freight bill in 1966.
4. The existing foodgrain ration system in
India requires 950,000 tons per month, originally
programmed at 850,000 tons from imports and 100,000
tons from domestic procurement. Present indica-
tions are that about 700,000 tons will be im-
ported in June, about the same level as in the
first three months of the year and somewhat less
than in April and May. The elaborate ration system
has been maintained by drawing down stocks, which
at the beginning of June were estimated at only
about 300,000 tons, the lowest level in the past
two years. Stocks of foodgrains totaling 1.7 mil-
lion tons held by individual states cannot be
used by the central government to fulfill its ra-
tioning commitment. Even if the Suez Canal had
not been closed, India would probably not have
been able to fulfill all its rationing commitments
throughout the summer months. As early as April,
the government was unable because of its other ra-
tioning commitments to provide foodgrain in famine
areas necessary to maintain a level of 1,300 cal-
ories per day considered the minimum amount re-
quired for subsistence.
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JO,
23 June 1967
Talking Paper for Memo The Suez Canal Closure and
Indian Foodgrain Supplies
1. This memo assesses the effect the Suez Canal
closure is having and will have over the next few months
on grain shipments to India. The paper's main conclu-
sions are; (1) India's food supplies will probably not
be much affected, (2) the principal effect will be sub-
stantially increased freight coats caused by longer
journeys around the Cape of Good Hope, and (3) India
would have been unable to meet its rationing commitments
this summer even if the Canal had not been closed.
2. This memo was initiated and produced by ORR and
coordinated with OCI.
3. Routine internal and external dissemination
is recommended.
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