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.