USDA EXTENDS $1 BILLION IN CREDIT GUARANTEES TO SOUTH KOREA Release No. 0136.99 Eric VanChantford (202) 720-9443 Vanchantford@fas.usda.gov USDA EXTENDS $1 BILLION IN CREDIT GUARANTEES TO SOUTH KOREA WASHINGTON, March 29, 1999-Agriculture Secretary Dan Glickman today announced that the U.S. Department of Agriculture has allocated $1 billion in GSM-102 export credit guarantees for sales of U.S. agricultural products to South Korea in fiscal year 1999. "This $1-billion allocation will help support sales of a wide range of American farm and food products this year," Glickman said. "South Korea is a major market for U.S. agricultural products and a valued customer. Korea continues to need assistance in financing imports as it works to rebuild its economy, and this allocation will provide assistance as it helps us export our farm products." "During the last two years, in response to the global financial crisis which has hurt U.S. agricultural exports, the department has allocated record levels of GSM export credit guarantees," Glickman said. "This allocation to South Korea is a continuation of our efforts to use the GSM program to counter the adverse effects of the global financial crisis on American agriculture." In fiscal 1998, South Korea was the fourth largest market for U.S. agricultural, wood, and seafood exports. U.S. sales of grains, livestock products, soybeans, cotton, fruits and vegetables, and other commodities totaled more than $2.4 billion. GSM-102 credit guarantees supported nearly 60 percent of those sales. GSM-102 export credit guarantees underwrite credit extended by the private sector in the United States to approved foreign banks providing credit to foreign buyers. Payment is guaranteed by USDA's Commodity Credit Corporation. Commodity allocations are attached. COMMODITY ALLOCATIONS Exporters may apply for credit guarantees on a first-come, first-served basis to cover sales of any of the commodities specified below: Immediately Total Commodity Allocated Unallocated Allocation Cotton $ 63 million $ 62 million $125 million Feed grains (barley (unhulled); $160 million $160 million $320 million white corn; yellow corn; sorghum; rye and oats) & Soybean Meal Wheat $ 55 million $ 55 million $110 million Soybeans $ 75 million $ 75 million $150 million Beef meat, frozen or chilled $ 30 million $ 30 million $ 60 million Pork meat, frozen or chilled $ 13 million $ 12 million $ 25 million Horticultural Products $ 3 million $ 2 million $ 5 million Fruit, dried (raisins, prunes, dates, figs, and apples) Fruit, fresh (apples; apricots; avocados; blueberries; cherries; grapefruit; grapes; kiwi; lemons; melons, including watermelon, cantaloupe, and honey dew; nectarines; oranges; peaches; pears; plums; raspberries; strawberries; and tangerines) Potatoes (cut and chilled or frozen; flakes; granules; dried and dehydrated refers to flakes and granules;) Tree nuts (almonds, pecans, pistachios, walnuts, and hazelnuts) Hides and skins $ 25 million $ 25 million $ 50 million (guidelines: hides usually include cattle hides--wet blues are not covered; skins include calf/kip, pig, sheep and lamb splits) Leather $ 10 million $ 10 million $ 20 million (processed to the wet blues stage; guidelines: leather is a hide that has been tanned and processed) Wood Pul $ 48 million $ 47 million $ 95 million Wood Products, solid $ 5 million $ 5 million $ 10 million (fiberboard, flooring, laminated lumber, lumber, molding, builders joinery, oriented strand board, particle board, plywood, railroad ties, siding, treated lumber, utility poles, and veneer) Roe $ 3 million $ 2 million $ 5 million (fish eggs and sea urchin eggs salted/unsalted) Surimi, frozen $ 13 million $ 12 million $ 25 million TOTAL $ 1 billion TERMS OF COVERAGE In accordance with section 1493.20(v)(1), this announcement offers coverage on an f.a.s. or f.o.b. basis. Coverage up to 98 percent of the principal is offered on credit terms from 90 days to 2 years, except for solid wood products and wood pulp, for which coverage is offered on credit terms of up to 720 days. Adjustable interest coverage is also offered in accordance with FAS program announcement PR 1080-94, issued Sept. 26, 1994. ELIGIBLE BANKS Any banks approved by CCC in Korea are eligible. Exporters are advised to obtain from their foreign buyer the name of the CCC-approved foreign bank that will be opening the letter of credit. GUARANTEE FEE RATES Pursuant to section 1493.70, fees are as stated in program announcement PR-1080- 94, issued Sept. 26, 1994. SPECIAL TERMS AND CONDITIONS Sales must be registered with CCC by Sept. 30, 1999, and exporters' contractual arrangements must call for exports no later than Nov. 30, 1999. In accordance with the definition of "U.S. Agricultural Commodity" appearing in 7 C.F.R. 1493.20(z)(2)(i)(ii), leather and surimi have been determined to be high-value agricultural products, and 90 percent or more of the agricultural components by weight, excluding packaging and added water, must be entirely produced in the United States. Under this announcement, applications for fish roe sales must specify Alaskan pollack roe. The Government of the Republic of Korea has advised that roe purchases are expected to be used only for Alaskan pollack roe. POINTS OF CONTACT FAS news releases are available on the Internet at http://www.fas.usda.gov and by fax polling. Callers should set their fax machines for polling and dial (202) 720- 1728. For additional information, contact FAS Information Division at (202) 720-7115. In the event of any discrepancy between the FAS Online Home Page version of this release and the standard FAS release (available in hard copy and by facsimile from FAS), the standard release shall prevail as establishing terms and conditions of any CCC payment guarantees issued pursuant to this release.