Aussie Sheep Shunned By Saudis, Abu Dhabi

AUSTRALIA and Saudi Arabia find themselves in a beef over lamb chops. What appeared to be a minor trade tiff, now threatens to undermine Australia's live sheep trade throughout the Middle East.

The dispute began when the Saudis suddenly rejected a lamb shipment in late July. Saudi meat inspectors said the sheep were diseased. Since then, five more shiploads have been rejected.

Australian officials deny the sheep were diseased. The alleged diseases are not ones found in Australian sheep stocks, they say. Diplomatic letters from Canberra and requests for proof have gone unanswered.

Late last month Australia responded by suspending shipments to Saudi Arabia, its biggest single buyer of live sheep. Such sales totaled $76 million last year.

Abu Dhabi, a state in the United Arab Emirates (UAE), has also rejected some Australian shipments, citing diseases hitherto unknown in Australian sheep. In late August, government-controlled papers in Kuwait and Bahrain called for other Persian Gulf states to support the Saudi ban.

The Gulf Cooperation Council will meet next month in Riyadh to consider a joint strategy on Australian sheep imports, wire reports say.

An article last week in Al Khaleej, a UAE Arabic newspaper, urged consumers to boycott ``dangerous'' Australian mutton.

So far, the rejected sheep have been successfully shipped to other Gulf states. But Australian officials are concerned that the adverse publicity is starting to undermine Australia's lucrative $266 million a year Mid-East sheep trade. The Australian Meat Livestock Corporation's Bahrain office has sent out a press release to counter the publicity.

One Australian government official described the situation as a ``strange and puzzling'' form of trade protection.

There are Gulf media reports that the embargo on Australian sheep is the fallout from a dispute between members of the Saudi Royal family. There is also speculation that Saudi sheep farmers, having trouble competing against lower-priced Australian mutton, have engineered a shortage to bolster their market share and prices.

In an attempt to keep the dispute from escalating, Canberra has made few public comments on the issue.

An Australian trade delegation touring Gulf states in August was given assurances no further problems would arise. But industry and government officials are becoming frustrated at the direction of events and the lack of Saudi response. And domestic political prressure for action is increasing.