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EXPORT NEWS AND OPPORTUNITIES
USDA Announces 18 FY 1998 GSM-102 Programs for Horticultural Products
As of October 20, the United States Department of Agriculture (USDA) has authorized credit guarantees for sales of U.S. agricultural products to more than 30 different countries. To date, 18 Export Credit Guarantee Programs (GSM-102 ) have been announced. The General Sales Manager has allocated approximately $1.7 billion for the 18 FY 1998 GSM-102 programs.
As with last year, specific dollar amounts are not assigned to commodities in order to provide buyers and sellers maximum flexibility in arranging the size of their transactions within the scope of the overall allocation. Exporters may apply for credit guarantees on a first-come-first-served basis to cover sales of any of the eligible commodities.
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 tables on pages 11 and 12 presents FY 1998 GSM-102
allocations by country as of October 20 for various horticultural
commodities and products.
USDA Expands 1998 Supplier Credit Guarantee Coverage to More Than 30 Countries
As of October 20, the General Sales Manager (GSM) has expanded the Supplier Credit Guarantee Program from 6 programs in FY 1997 to 13 program for FY 1998. Approximately $150 million has been allocated in credit guarantees for sales of U.S. agricultural products to more than 30 different countries.
Exporters may apply on a first-come-first-served basis to cover sales of over 55 different horticultural products, such as fresh fruit, fresh vegetables, canned fruit, frozen vegetables, wine and brandy, dried fruits, tree nuts, potatoes, etc.
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 tables below present FY 1998 SCGP allocations by country and product as of October 20, 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. Information on the FY 1998 GSM-102 and Supplier Credit Guarantee Programs is available on the Internet at http://www/fas.usda.gov.
(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 October 20, 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/Raisins,
prunes, dates, figs, and apples. 3/Apples,
apricots, avocadoes, blueberries, cherries, grapes, grapefruit,
kiwifruit, lemons, melons, nectarines, oranges, pears, plums,
peaches, raspberries, strawberries, and tangerines. 4/Strawberries,
blueberries, apples, cherries, plums, raspberries, and
blackberries. 5/Asparagus, beans, carrots, corn,
peas, tomatoes, and tomato paste. 6/Beans,
broccoli, carrots, corn, spinach, onions, peppers, mushrooms, and
zucchini, including combinations thereof. 7/Almonds,
pecans, pistachios, walnuts, and hazelnuts. 8/Cocktail,
peaches, pears, and tart cherries.
1/Coverage is detailed in FAS Program
Announcements for all commodities, including those not listed as
of October 20, 1997. FAS news releases are available on the
Internet at http://www.fas.usda.gov. 2/ Cocktail,
peaches, pears, and tart cherries. 3/ Dates,
figs, prunes, and raisins. 4/ Apples, apricots, avocados,
blueberries, cherries, grapes, grapefruit, kiwi, lemons, melons,
nectarines, oranges, pears, plums, peaches, raspberries,
strawberries, and tangerines. 5/ Almonds,
pecans, pistachios, walnuts, and hazelnuts. 6/ Asparagus,
beans, carrots, corn, peas, tomatoes, and tomato paste. 7/
Asparagus, beans, broccoli, carrots, cauliflower,
celery, corn, garlic, lettuce, onions, peppers, potatoes, and
tomatoes. 8/ Beans, broccoli, carrots, corn,
mushrooms, onions, peppers, spinach, and zucchini, including
combinations thereof. 9/ Blackberries,
blueberries, raspberries, and strawberries.
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