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EXPORT NEWS AND OPPORTUNITIES
USDA Announces West Africa and Tunisia GSM-102 Programs and Amends Brazil, Jordan, Mexico and Andean Programs
On October 26, the U.S. Department of Agriculture (USDA) authorized $52 million in credit guarantees for sales of U.S. agricultural commodities to the West Africa Region under the GSM-102 for fiscal year 1999. The West Africa Region includes Benin, Burkina Faso, Cameroon, Cape Verde, Central African Republic, Congo, Cote d'Ivoire, Gabon, Gambia, Ghana, Guinea-Bissau, Guinea, Liberia, Mali, Mauritania, Nigeria, Senegal, Sierra Leone, and Togo.
On November 5, USDA authorized $20 million in credit guarantees for sales of U.S. agricultural commodities to Tunisia under the GSM-102 program for fiscal year 1999.
Exporters may apply for credit guarantees for the West Africa Region and Tunisia GSM-102 programs, on a first-come, first-served basis to cover sales of any of the commodities specified in the GSM list published in FAS announcement PR 0434-98, issued September 8, 1998, or as superseded. The following horticultural products are eligible under the export credit guarantee programs for FY 1999: dried fruit; fresh fruit; 100 percent fruit juices; fruit and vegetable concentrates, pastes, pulps and purees; honey; hops or hops extract; tree nuts canned vegetables; dried vegetables; wine; and brandy.
In addition, USDA also amended the Brazil, Jordan, and Andean Region GSM-102 programs. On October 19, USDA amended the Brazil GSM-102 program to include eligible banks in the Cayman Islands. Any CCC-approved Nassau branch of an Andean Region or Brazilian bank, or any Cayman Island branch of a CCC-approved Brazilian bank is eligible. Exporters are advised to obtain from their foreign buyer the name of the CCC-approved foreign bank that will be opening the letter of credit.
On October 28, USDA amended the Jordan GSM-102 program to include fresh fruit as an eligible commodity. The following fresh fruit are eligible: apples, apricots, avocados, blueberries, cherries, grapefruit, grapes, kiwi, lemons, melons, nectarines, oranges, peaches, pears, plums, raspberries, strawberries, and tangerines. All other terms and conditions previously announced, pertinent to Jordan's GSM-102 program, in PR 0524-98 remain the same.
On November 5, USDA amended the Andean Region GSM-102 program to include Ecuador as an eligible banking and destination country. All other terms and conditions previously announced remain the same. The previous program announcement pertinent to the Andean Region's GSM-102 program is PR 0533-98.
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 12 presents the FY 1999 GSM-102 programs for which USDA has authorized credit guarantees for sales of U.S. horticultural products as of November 27, 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
USDA Amends Supplier Credit Guarantees to Mexico
On October 29, USDA amended the Supplier Credit Guarantee Program (SCGP) for Mexico for fiscal year 1999 to change the terms of coverage. The terms of coverage are amended to offer coverage only on a f.a.s. or f.o.b. basis, in accordance with section 1493.410(t)(1). Coverage is not available under this announcement for maritime, air freight, or insurance costs. 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 under this announcement. The previous program announcement pertinent to Mexico's SCGP is PR 0497-98.
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 on page 13 presents the FY 1999 SCGPs for which USDA has authorized credit guarantees for sales of U.S. horticultural products as of November 27, 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, 202-720-0911).
FY 1999 GSM-102 CREDIT GUARANTEE COVERAGE 1/
1/Coverage is detailed in FAS Program Announcements for all commodities, including those not listed as of
November 6, 1998. FAS news releases are available on the Internet at http://www.fas.usda.gov/excredits/exp-cred-guar.html.
FY 1999 SUPPLIER CREDIT COVERAGE 1/
1/Coverage is detailed in FAS Program
Announcements for all commodities, including those not listed as of November 6, 1998. FAS
news releases are available on the Internet at http://www.fas.usda.gov/excredits/scgp.html.
Brazil's 1998/99 Orange Juice Production and Export Forecasts Revised Upwards
The Agricultural Trade Office in Sao Paulo maintains its forecast for Sao Paulo's 1998/99 orange crop at 320 million boxes, 24 percent below the previous year's output. The total Brazilian orange juice production for 1998/99 has been increased by 15 percent to 1.07 million tons, based on a higher volume of oranges delivered for processing in Sao Paulo than earlier expected. The 1998/99 estimate for oranges for processing in the state of Sao Paulo has been revised upward from 225 to 255 million 40.8 kilo boxes. The estimate for domestic orange consumption in Sao Paulo has been reduced by 32 percent, due to the higher volume of fruit delivered for processing. Brazil's orange juice export forecast for 1998/99 was increased by 13 percent to 1.18 million tons (65 degrees brix), based on the larger production estimate.
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