NOTES ON THE SHAN CPIUM FRCTOSALS
RECEIVED IN
REGISTRY No. 50
7 M 1975
The first Shan opium proposals were rejected by the US government in August 1973.
The present proposals were drawn up efter a meeting between 3 Shan leaders and U.S. Congressmen Lester Wolff and Morgan Murphy in January, 1975.
The three Shan groups The leaders who signed these proposals represent, or can speak for, virtually every Shan cpium traling
The Shan United Army group except the KMT and their satellites.
1.
is at present the largest organization in the opium business;, the Shan State Army Eastern includes all non-Communist Shan forces east of the Salween; and the Shan State Army will almost certainly be followed in these negotiations by the Kachin, Karen and Ba-0.
2.
The Communists. The 3 groups participating in these proposals buy a large percentage of their opiuma in Communist-held territory, and through the SSA we expect to get tacit - though not specific CPB consent. The Communist areas of Hokeng and Jah State are largely dependent on opium, and a sale through Shan middlemen to some international body would remove the CFB's embarrassment over their idealogical objections to, but de facto dependence on, the narcotics trade.
3.
The Price. When the first Shan proposals were delivered to the U.S. Narcotics Bureau in July 1973; the border price wosunder 1,000 baht per viss of opium. Since then there has been a bad harvest, a world shortage of opium, and currently prices are high because of the seasonal price rise before the new crop is harvested According to our scurces amongst the Thai hill tribes (i.e. source . not dependant on the Shans ), the cpium price in mid-January 1075
in Huch Krai was 3,600 baht per viss. This means that Congress a Wolff's Thailand visit - and therefore these proposals have unfortunately coincided with the highest price that opium has ev reached. In recognition of this, the Commander of the Shan Unit ! Army has offered 1 ton of opium at 3,100 baht per viss. ..e guarantees that if the border price is higher than this at the t. le of purchase, he will hold to his 3,100 baht figure, but if the border price falls below this, he will as a gesture of goodwill come down to meet it.
A.
Timing a.
b.
C..
}
The Commander of the SUA is now holding 1 ton of op available for the first stare in the negotiations. This step is intended to prove that there will be n adulteration similar to the 1972 MT sale, and to ectablish a minimum of negotiating confidence on bo sides.
The second purchase of 5 tons is necessary to attra leaders from the interior of Shan State to the opiu conference. For many this will mean a 3 month rour trip involving 100-200 soldiers. The sale of 5 ton would cover their costs and provide a valuable reasonable profit.
At the 3rd stage the SUA leve guaranteed 50 tons of opium. But if the proposals wer should be accepted March so they could buy during the harvest, they believe their trading area alone could provide 200 An early decision before the stated deadline would therefore be very advantageous. The longer the del the greater the percentage of the 1975 crep that wil have been disposed of on the block market.
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