U.S. farm exports to RI may fall 50%

U.S. farm exports to RI may fall 50%

WASHINGTON (Reuters): U.S. agricultural exports to
financially-troubled Indonesia could decline by 50 percent in
fiscal 1998 (October-September), a top U.S. Agriculture
Department official said yesterday.

Last year, Indonesia imported about $776 million worth of U.S.
farm goods. "Probably, we'll see that cut in half this year,"
USDA Undersecretary Gus Schumacher told the Senate Appropriations
subcommittee on agriculture.

Most of the expected decline will be in high-value or
processed U.S. farm goods, Schumacher said. But bulk commodity
exports could also be affected, he said.

"We're working very hard to maintain our important cotton
market in Indonesia," he said.

In February, U.S. exporters registered $6 million in cotton
sales to Indonesia under USDA's GSM-102 export credit program.

But altogether, U.S. exporters have sold only about $34
million of U.S. farm goods - including at least $8.2 million of
cotton and $24.1 million of oilseeds - to Indonesia in fiscal
1998 under a $400 million GSM-102 package.

Indonesia's banking crisis has made it nearly impossible for
importers to arrange financing to buy agricultural goods - even
with the loan guarantees provided by USDA.

USDA has also offered Jakarta $25 million in long-term, low-
interest loans under title I of the PL480 program to buy U.S.
wheat, soybeans and rice.

Meanwhile. the Treasury and Commerce Departments, in a bid to
highlight the need for new funding for the International Monetary
Fund, on Tuesday issued a state-by-state analysis of the
importance of Asian export markets.

The thick report, in a style suitable for use by Capitol Hill
legislators from each state, warns exports might suffer from a
prolonged Asian slowdown.

Though it does not directly mention the IMF, it was issued as
the Clinton administration lobbied Congress for $18 billion of
funding for the international lending agency that is spearheading
multi-billion-dollar bailout efforts for South Korea, Indonesia
and Thailand.

In a related development, U.S. Treasury Secretary Robert Rubin
said on Tuesday the economic crisis in Asia that started last
year appeared to have been contained although it was still far
from being resolved.

"The potential for contagion has been contained after an
initial burst," Rubin told the U.S. Chamber of Commerce in a
speech on legislation providing additional money for the
International monetary Fund.