U.S. resumes GSM credit for Indonesia

U.S. resumes GSM credit for Indonesia

JAKARTA (JP): The U.S. Department of Agriculture (USDA) has
resumed its credit guarantee facilities for the importation of
agricultural products from the United States.

The USDA announced on Thursday that the GSM-102 credit
program, which offers total guarantees of US$400 million for a
range of 27 commodities including cotton, soybeans, wheat,
soybean meal, wood, pulp and solid wood products is once again
being made available to Indonesian importers.

Earlier reports said that Indonesian commodity importers
suffered a trade financing crunch following suspension of the
credit facility.

The GSM-102 program, which covers U.S. agricultural exporters
against nonpayment by foreign buyers, was suspended after a
closed Indonesian bank whose liabilities had been assumed by the
Indonesian Bank Restructuring Agency defaulted on a payment to a
U.S. exporter.

The USDA said that the eligibility of the new credit program
had been extended to 38 Indonesian banks.

The credit terms cover letters of credit of 90 days to three
years. Freight charges are also included in the guarantee
coverage.

The U.S. allocated $400 million for Indonesian trade under the
program in 1999, of which over one-quarter was used to purchase
cotton, soybeans, wheat and oilseeds.

Many Indonesian exporters are dependent on imports of raw
materials for their products. Both exporters and importers have
been hit by difficulties in securing trade finance over the
course of the financial crisis in Indonesia.(hen)