U.S. HIKES RICE CREDITS TO RP
WASHINGTON, MARCH 26, 2008 (STAR) By Jose Katigbak, Star Washington Bureau — Amidst reports of a looming food crisis in the Philippines, the United States Department of Agriculture said it has increased by $10-million to $75- million credit guarantees to the Philippines under the Commodity Credit Corporation’s Export credit guarantee program (GSM-102).
This will help finance plans by the National Food Authority to purchase an additional 100,000 metric tons of US rice which together with the 35,000 metric tons it bought earlier this year under US Public Law 480 would represent one of the biggest US imports of rice by the Philippines in a calendar year.
Local rice traders said the NFA will hold a tender in Washington in the next few days. Supplies are available and the only impediment could be prices.
In recent weeks prices of well-milled, high-quality US rice have fluctuated between $720 and $730 per metric ton.
The GSM-102 program helps ensure that credit is available to finance commercial exports of US agricultural products, while providing competitive credit terms to buyers. The program covers credit terms of up to three years.
By reducing financial risk to lenders, credit guarantees encourage exports to buyers in countries — mainly developing countries — where credit is necessary to maintain or increase US sales, but where financing may not be available without such guarantees, a USDA fact sheet said.The Philippines earlier this year took delivery of 35,000 metric tons of American rice worth $30 million under the PL480 program for developing countries having difficulty meeting food needs through commercial channels and experiencing a shortage of foreign exchange earnings.
This program provides export financing for US farm goods over payment periods of up to 30 years with a concessionary interest rate of not more than three percent per annum.
The USDA announcement last Friday increasing the credit guarantees for export sales to the Philippines did not make any reference to reports of a looming food crisis in that Southeast Asian country.
President Arroyo has said there will be no rice shortage this year but admitted prices are expected to rise.
Over the years the Philippines has had to depend on imported rice to feed its over 80 million population. According to NFA statistics Filipinos consume about 12 million metric tons of rice a year, an average daily consumption of 33,800 metric tons.
The country needs to import from 1.8 million metric tons to 2.4 million metric tons annually.
Chief News Editor: Sol Jose Vanzi
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