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EXPORT NEWS AND OPPORTUNITIES
USDA Announces 1998 GSM-102 Programs for Horticultural Products for Argentina and the East Caribbean
As of September 22, the United States Department of
Agriculture (USDA) has authorized credit guarantees for sales of
U.S. agricultural products to Argentina and the East Caribbean
Region under the Commodity Credit Corporation's Export Credit
Guarantee Program (GSM-102) for fiscal year 1998. USDA should
announce 1998 GSM-102 programs for other countries in early
October.
USDA authorized $16 million in credit guarantees for sales of
U.S. agricultural commodities to Argentina under the 1998 GSM-102
program. Exporters may apply for credit guarantees on a
first-come-first served basis to cover sales of potatoes and
fresh fruit. Coverage up to 98 percent of the principal is
offered on credit terms from 90 days to 3 years for horticultural
products.
USDA has also authorized $60 million in credit guarantees for
sales of U.S. agricultural commodities in the East Caribbean
Region--Barbados, Grenada, Guyana, St. Lucia, St. Vincent and the
Grenadines, Suriname and Trinidad and Tobago--under the 1998
GSM-102 program. Of the $60 million authorization, $30 million of
operational credit guarantees are available to U.S. exporters for
sales of eligible commodities on a first-come-first served basis.
Specific details for the unallocated amount of $30 million will
be issued later. Canned vegetables and fresh fruit are the
horticultural products eligible under the East Caribbean GSM-102
program. Coverage up to 98 percent of the principal is offered on
credit terms of 90 days to 3 years for the eligible horticultural
products.
The GSM-102 program makes available financing for the sales of
U.S. agricultural commodities overseas. USDA does not provide
financing, but guarantees payments due from foreign banks. USDA
typically guarantees 98 percent of the principal and a portion of
the interest. The GSM-102 program covers credit terms from 90
days to 3 years.
Under the program, once a firm sale exists, the qualified U.S.
exporter applies for a payment guarantee before the date of
export. The U.S. exporter pays a fee calculated on the dollar
amount guaranteed, based on a schedule of rates applicable to
different lengths of credit periods. The CCC-approved foreign
bank issues a dollar-denominated, irrevocable letter of credit in
favor of the U.S. exporter, ordinarily advised or confirmed by
the financial institution in the United States agreeing to extend
credit to the foreign bank. The U.S. exporter may negotiate an
arrangement to be paid as exports occur by assigning the U.S.
financial institution the right to proceeds that may become
payable under the guarantee, and later presenting required
documents to that financial institution. Such documents normally
include a copy of the export report.
If a foreign bank fails to make any payment as agreed, the
exporter or the assignee may file a claim with USDA for the
amounts due and covered by the guarantee. USDA will pay the U.S.
bank and will take on the responsibility of collecting the
overdue amount from the foreign bank.
The table below presents FY 1998 allocations by country as of
September 22 for various horticultural commodities and products.
USDA
Announces 1998 Supplier Credit Guarantee Programs
for Argentina and Jamaica
On September 10, USDA authorized $3 million in credit
guarantees for sales of U.S. agricultural products to Argentina
under the CCC's Supplier Credit Guarantee Program (SCGP) for
fiscal year 1998. The allocation does not assign dollar amounts
to any of the eligible commodities and provides buyers and
sellers maximum flexibility in arranging the size of their
transactions within the overall allocation. Exporters may apply
for credit guarantees on a first-come-first-served basis to cover
sales of eligible commodities. The following horticultural
products are eligible under the Argentina SCGP: tree nuts, fresh
fruit, canned fruit, dried fruit, wine and brandy, fresh
vegetables, frozen vegetables, and potatoes. Coverage up to 50
percent of the principal is offered on credit terms of 15, 20,
30, 45, 60, 90, 120, 150, and 180 days. No interest coverage is
offered.
On September 15, USDA also authorized $5 million in credit
guarantees for sales of agricultural commodities to Jamaica under
the SCGP for fiscal year 1998. Exporters may apply on a
first-come-first-served basis to cover sales of the following
horticultural products: fresh fruit, fresh vegetables, canned
fruit, frozen vegetables, wine and brandy, dried fruits, tree
nuts, and potatoes. Coverage up to 50 percent of the principal is
offered on credit terms up to a maximum of 180 days.
The SCGP is unique because it covers short-term financing
extended directly by U.S. exporters to foreign buyers and
requires that the importers sign a promissory note in case of
default on the CCC-backed payment guarantee. The SCGP emphasizes
high-value and value-added products, but may include commodities
or products that also have been programmed under the GSM-102
program.
The table below presents FY 1998 allocations by country and
product as of September 22, 1997.
Cautionary information for use of the accompanying GSM and
SCGP tables: The tables reflect only exporter applications for
guarantees that have been entered into the GSM and SCGP
computerized system. At any given time, exporter applications are
in process, and not all of those received have been entered into
the system. Moreover, all applications are initially entered into
the system on a provisional basis until price reviews have been
completed, the guarantee fee has been received, and the written
guarantee has been issued. Thus, some applications now in the
system may in the future be removed, and the commodity balances
correspondingly increased.
Note: The GSM will consider requests to establish a SCGP and/or
GSM Program for a country or region or amend an authorized
program to include horticultural commodities and products which
are currently not eligible. (For further information on the SCGP
or GSM-102 Program for horticultural commodities, contact Yvette
Wedderburn Bomersheim, 202-720-9903).
1/ Coverage is detailed in FAS Program
Announcements for all commodities, including those not listed as
of September 22, 1997. FAS news releases are available on the
Internet at http://www.fas.usda.gov. Unless otherwise noted,
terms are FOB, 90-days to 3 years. 2/ Barbados,
Grenada, Guyana, St. Lucia, St. Vincent, and the Grenadines,
Surinam, Trinidad and Tobago. 3/Apples,
apricots, avocadoes, blueberries, cherries, grapes, grapefruit,
kiwifruit, lemons, melons, nectarines, oranges, pears, plums,
peaches, raspberries, strawberries, tangerines. 4/ Asparagus,
beans, carrots, corn, peas, tomatoes, and tomato paste.
1/Coverage
is detailed in FAS Program Announcements for all commodities,
including those not listed as of September 22, 1997. FAS news
releases are available on the Internet at
http://www.fas.usda.gov. 2/Almonds, hazelnuts,
pecans, pistachios, and walnuts/. 3/Apples,
apricots, avocados, blueberries, cherries, grapes, grapefruit,
kiwi, lemons, melons, nectarines, oranges, pears, plums, peaches,
raspberries, strawberries, and tangerines. 4/ Cocktail, peaches,
pears, and tart cherries. 5/Raisins, prunes,
dates, and figs. 6/ Wine and brandy. 7/ Asparagus,
beans, broccoli, carrots, cauliflower, celery, corn, garlic,
lettuce, onions, peppers, potatoes, and tomatoes. 8/ Asparagus,
beans, carrots, corns, peas, tomatoes, and tomato paste. 9/
Beans, broccoli, carrots, corn, and spinach.
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