EXPORT NEWS AND OPPORTUNITIES
Export Credit Guarantee Program: No Activity Since Last Publication
The Export Credit Guarantee Program (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 10 presents the FY 1999 GSM-102 programs for which USDA has authorized credit guarantees for sales of U.S. horticultural products as of February 12, 1999. 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 11 presents the FY 1999 SCGPs for which USDA has authorized credit guarantees for sales of U.S. horticultural products as of February 12, 1999. 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).
U.S. wine exports record 14th consecutive record breaking year
U.S. wine exports (including cider, fermented beverages, and must) reached $532 million in calendar year 1998, their 14th consecutive record breaking year, and a 28 percent gain over the preceding year. U.S. wine exports have increased 19-fold since 1985. Growth in exports has accelerated for the 5th consecutive year. In volume terms, U.S. wine shipments reached 2.7 million hectoliters in 1998, up 21 percent from the preceding year. The three top markets for U.S. wines, United Kingdom, Japan, and Canada accounted for approximately 61 percent of the value of 1998 exports. Although the Asian Financial Crisis put a damper on exports to most markets in Asia, Japan reported burgeoning sales, up 136 percent to $92 million. Japan replaced Canada as the second largest export market for U.S. wines. More varieties of higher quality U.S. wine, robust foreign demand, and market promotion efforts under the Market Access Program all boosted U.S. wine exports.