USDA moves on credit line for RI

USDA moves on credit line for RI

WASHINGTON (Reuters): In a move that could help U.S. farm exports, the U.S. Agriculture Department said Wednesday it will allow banks in Singapore to participate in a loan guarantee program for Indonesia.

USDA has allocated $400 million in GSM-102 loan guarantees to help the financially-struggling nation buy U.S. farm goods in fiscal 1998, which began Oct. 1.

But as of Feb. 27, Indonesia had used only $31.4 million of the loan guarantees -- to buy $24.1 million of oilseeds, $7.1 million of cotton and $200,000 worth of corn products.

A U.S. grain industry aide, who asked not to be identified, said USDA's action was "probably a brilliant move."

Given Indonesia's financial problems, U.S. exporters would likely much prefer to deal with Singapore banks, the industry aide said.

Even before Wednesday's action, USDA officials had said they expect activity under the Indonesia credit package to pick up in coming weeks.

But they hastened to add that new sales might not occur until after next week's elections in Indonesia.

Much of the $31.4 million in GSM-102 export credit sales to Indonesia have been on the books for some time.

However, $5 million of the cotton sales and $170,000 of the corn product sales have been registered since Feb. 6. Meanwhile, USDA is also considering a small PL480 food aid program for Indonesia.