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.