823.61311/6–947: Airgram
The Secretary of State to the Embassy in Peru
A–286. Embs A–379, June 9, 1947.72 The report communicated to the Embassy by the International Petroleum Co. that “the United States proposed to supply Peru with approximately 8,000 tons per month for the balance of the year” is unfounded and must rest upon some misunderstanding. US commitments do not extend beyond the periods covered by publicly announced export programs. At present this means not beyond August except in cases where allocations of [Page 1039] flour have been announced for both August and September. The supply situation in all claimant countries and imports made and in prospect from other sources than the US are taken into account in the preliminary study leading up to the announcement of the export programs.
Embassy’s recent reports (No. 7 of January 8, and No. 121 of June 1273) indicate that Peru’s commercial demand for wheat is increasing over the 150,000 tons hitherto regarded as a normal import requirement. The figure of 150,000 was used for Peru’s stated requirement to IEFC in 1946–47 and the recommendation of the Cereals Committee after study of Peru’s case was for shipments during that crop year to Peru from all sources of 100,000 tons. The reduction in imports recommended by IEFC was therefore 50,000 tons and represented an overall reduction in Peruvian consumption of wheat of about one-fifth. Against this figure known shipments July 1, 1946 to June 30, 1947 have, according to information here available, been about 120,000 tons inclusive of the recent emergency allocation of 10,000 tons of flour from the US. We note that Embs report No. 7 places imports during the calendar year 1946 at 112,745 metric tons. These figures indicate that Peru has, by reducing consumption of wheat, made a contribution to the alleviation of world shortages, roughly equivalent to what was recommended by IEFC.
Questionnaire replies of claimant countries to IEFC indicate total world import requirements for the crop year ending June 30, 1948 exceeding estimated world availability by over 50 percent. Under these circumstances it clearly will not yet be possible for countries dependent upon imports, of which Peru is one, to return to normal consumption and it is not probable that the IEFC Cereals Committee will be able to recommend a figure for total import for Peru in 1947–48 greatly different from that recommended for the crop year 1946–47. The Peruvian representative in that Committee will of course be given full opportunity to present Peru’s case before the Committee and its Executive Committee. Any reduction in Peru’s indigenous production of wheat or change of availability of other foods would of course be taken into account.
In view of the continuing critical shortage in cereals which keeps the supply situation this year on the same basis as a year ago, the request of the Peruvians for monthly quotas of 12,000 tons (Embs telegram 346, May 9 and despatch No. 1578, May 1474) suggests that the Peruvian Government may assume that the world supply situation has improved. Since this is clearly not the case, the Embassy may [Page 1040] wish, if circumstances in Peru make it advisable, to bring this aspect of the matter to the attention of the Peruvian Government so that its planning for the crop year 1947–48 as to level of consumption may be placed on as realistic a basis as possible.