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EXPORT NEWS AND OPPORTUNITIES
USDA Amends Egypt, Phillippines and Turkey GSM-102 Programs
Since the last publication, the United States Department of Agriculture (USDA) has amended the Egypt, Philippines and Turkey GSM-102 programs. On May 8, the USDA increased by $50 million the allocation of credit guarantees for sales of U.S. agricultural commodities to Turkey for fiscal year 1998. This action increases the total 1998 allocation for sales to Turkey from $250 million to $300 million. All other terms and conditions previously announced remain the same. Canned vegetables are eligible under the Turkey GSM-102 program.
On June 15, USDA issued press releases on the Egypt and Philippines GSM-102 programs. The Philippines GSM-102 program was amended to include wine and brandy as eligible products. All other terms and conditions previously announced remain the same.
USDA also amended the allocation of credit guarantees available for sales of U.S. agricultural commodities to Egypt under the GSM-102 program for fiscal year 1998. The total 1998 authorization for coverage to Egypt under GSM-102 remains unchanged at $225 million, with $100 million operational. The following horticultural products/commodities are now eligible under the Egypt GSM-102 program: canned fruit, dried fruit, tree nuts and canned vegetables. All other terms and conditions previously announced remain the same.
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 on page 13 presents FY 1998 GSM-102 programs for which USDA has authorized credit guarantees for sales of U.S. horticultural products as of June 19, 1998. Additional information about the GSM-102 program, regulations, country specific press releases and program announcements, and a Monthly Summary of Export Credit Guarantee Program Activity may be accessed on the Internet at: http://www.fas.usda.gov/excredits/exp-cred-guar.html
Supplier Credit Guarantee Program: No Activity Since Last Publication
The Supplier Credit Guarantee Program (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 on page 14 presents the FY 1998 SCGPs for which USDA has authorized credit guarantees for sales of U.S. horticultural products as of June 19, 1998. Additional information about the SCGP, regulations, country specific press releases and program announcements, and a Monthly Summary of Export Credit Guarantee Program Activity may be accessed on the Internet at: http://www.fas.usda.gov/excredits/scgp.html
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).
Mexican and Greek asparagus production to increase
Mexican asparagus production for marketing year 1998 (Jan-Dec) is forecast to reach 34,000 metric tons, up 13 percent from the previous year, due mostly to increased acreage and higher yields. Over 95 percent of Mexico's asparagus is produced in Sonora, Baja California and Guanajuato. Mexico's asparagus exports for marketing year 1998 are forecast at 26,000 tons. Approximately 75 to 80 percent of Mexico's fresh asparagus exports are destined for the United States, with the balance going to Europe and Japan.
Greek asparagus production has steadily increased since its introduction in the late 1980's, reaching an estimated production level in 1998 of 30,000 tons. Production includes both white and violet asparagus and is harvested from early February to mid-May. Greece exports about 80 percent of its production to Germany, with small quantities going to France, Holland and Spain. Spain buys second quality mostly for canning. The Greek government has encouraged the production of asparagus as an alternative crop. European Union (EU) subsidies are available for asparagus planting, maintenance and machinery purchases. Also, up to 50 percent of the processing and packing of asparagus can reportedly be covered by EU subsidies.
FY 1998 GSM-102 CREDIT GUARANTEE COVERAGE 1/
1/ Coverage is detailed in FAS Program
Announcements for all commodities, including those not listed as
of June 19, 1998. FAS news releases are available on the Internet
at http://www.fas.usda.gov/excredits/exp-cred-guar.html.
2/ Bolivia, Chile, Colombia, Ecuador, Peru and Venezuela.
3/ Azerbaijan, Georgia, and Armenia.
4/ Belize, Costa Rica, El Salvador, Guatemala, Honduras,
Nicaragua, and Panama.
5/ Czech Republic, Hungary, and Slovakia.
6/ Kenya, Uganda, and Tanzania.
7/ Bosnia, Croatia, and Slovenia.
8/ Angola, Botswana, Burundi, Lesotho, Madagascar, Malawi,
Mauritius, Mozambique, Namibia, Rwanda, Seychelles, South Africa,
Swaziland, Democratic Republic of the Congo (formerly Zaire),
Zambia, and Zimbabwe.
FY 1998 SUPPLIER CREDIT COVERAGE 1/
1/
Coverage is detailed in FAS Program Announcements for all
commodities, including those not listed as of June 19, 1998. FAS
news releases are available on the Internet at http://www.fas.usda.gov/excredits/scgp.html .
2/ Bolivia, Chile, Colombia, Ecuador, and Peru.
3/ Estonia, Latvia, and Lithuania.
4/ Belize, Costa Rica, El Salvador, Guatemala, Honduras,
Nicaragua, and Panama.
5/ Czech Republic, Hungary, and Slovakia.
6/ Indonesia, Korea, Malaysia, Philippines, Singapore, and
Thailand.
7/ Croatia and Slovenia.
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