* First use of US credits for wheat this year
* Egypt is world's largest wheat importer
WASHINGTON Feb 28 Egypt recently used U.S.
export credits to pay for a U.S. wheat purchase, its first use
of the guarantees for the food grain this year, the U.S.
Agriculture Department said on Thursday.
The credits were tapped as concerns were rising among
bankers about the ability of Egypt, the world's largest wheat
importer, to meet its needs through its traditional methods of
public tenders and letters of credit.
Created to facilitate U.S. farm exports, USDA's export
credit guarantee program, known as GSM-102, assures lenders they
will get paid even if a borrower defaults. The short-term
credits cover up to 98 percent of the principal and a portion of
USDA said $17.7 million worth of wheat was sold to Egypt in
the past couple of weeks through the export credit program. A
spokeswoman was unable to provide the specific date.
The amount of credits used correlates closely with a
60,000-tonne cargo of U.S. soft red winter wheat reported on
Feb. 20. The cargo, for April shipment, was sold by Venus at
$296.75 per tonne.
However, the same company on Feb. 2 sold another 60,000
tonnes of SRW wheat to Egypt for March shipment at $306.80 per
Credits were also issued for $20 million of soybean oil and
$9.8 million of soybeans earlier in the fiscal year, which
started Oct. 1.
The wheat purchased under the credit program represents a
fraction of the 1.1 million tonnes sold to Egypt during the
marketing year that ends on May 31.
During the previous fiscal year, USDA credits were used for
$98.3 million of soybeans and $13.1 million of wheat to Egypt.
USDA typically reports the destination of exports but not the
name of the buyer.