STATUS OF US WHEAT SALES TO THE PRC

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP80B01495R000600150039-1
• Release Decision: RIPPUB
• Original Classification: C
• Document Page Count: 2
• Document Creation Date: December 19, 2016
• Document Release Date: December 23, 2005
• Sequence Number: 39
• Publication Date: September 20, 1972
• Content Type: MF

C ~ N'FIL 3 ? ~ ~ ii L 25X1
Approved For Releae-406/61/17 : CIA-RDP80B -
2 0 SEP 1972
MEMORANDUM FOR: Deputy Director for Intelligence
1. The US agricultural attache in Paris has learned
that the 408,000 tons of US wheat purchased by Dreyfus
presumably for delivery to the People's Republic of China
(PRC), may not be destined for China. Although the
application for export listed the PRC as the destination,
Dreyfus holds title to the wheat and can sell the wheat
to any Far Eastern country except for denied countries
designated by the US Department of State.
2. It now appears that the Dreyfus Company may try
to ship French rather than US wheat to China. During
1961-70 France exported sizable quantities of grain to
the PRC. France did not ship grain to the PRC in 1971 or
1972 presumably because French firms were unable to acquire
European Community (EC) restitution payments. The agri-
cultural attache reported that the Dreyfus Company --
possibly with the tacit support of the French government --
may be using the US deal to pry the necessary subsidy from
the EC to export French grain.
3. The Dreyfus Company would find itself in a favorable
position if EC approval is forthcoming. Dreyfus purchased
the US wheat when the market was just beginning its steep
rise and has collected the US export subsidy for Asian
delivery. One customer for this wheat could be Japan.
So far Japan has contracted for the delivery of about
2 million tons for delivery between July and November 1972.
Japan suspended the purchasing of wheat between 26 July and
13 September because of high prices. Later in September,
dwindling stocks apparently forced Japan to re-enter the
world market. Japan is almost certain to purchase sizable
quantities of wheat between now and the end of the year.
Dreyfus would be in a position to supply US wheat -- pur- 25X1
chased prior to 25 August and heavily subsidized -- to Japan
at cheaper prices than US export
Approved For Release ~
put y Director
E onomic Research
 25X1 Approved For Release 2006/01/17 : CIA-RDP80BO1495R000600150039-1
Approved For Release 2006/01/17 : CIA-RDP80BO1495R000600150039-1