Chapter II: THE MAJOR PLAYERS IN INTERNATIONAL FOOD TRADE

This chapter describes the major players in international food trade involved in developing country imports, and the ways in which they provide or facilitate food import finance.

A. International trade houses

The great majority of the world trade in cereals and oilseeds is carried out nowadays by private operators. International trade houses dominate, but brokers are also of some importance. Brokers are intermediaries remunerated on a commission basis by putting together a buyer and a seller. Although their role has markedly declined with the reduction of the number of intermediaries in the commercial chain, they still play a role, particularly in facilitating the operations of traders.

As well as purchasing cereals or oils in one place and selling them in another, international trade houses ensure their regrouping, storage, processing and transport (in particular maritime transport) Their operations are profitable less because of their logistical functions, but rather because of their overall management of trading positions (e.g. arbitrage between physical and futures markets). As part of their operations, they provide a wide array of financing solutions to their commercial counterparties. Their financing practices are not identical across commodities. For example, in the rice market, it is common for traders to carry the financing charges of the rice while it is being shipped to its final destination (which is in many cases not known at the moment that the rice is loaded). In contrast, traders tend to sell wheat, maize, soybean oil and palm oil before they are being loaded for export, with the effect that the buyer, not the trader, in effect carries the financing charges of the goods in transit.

Most of the large food trading enterprises are privately-held, and information on their operations can therefore be difficult to obtain. The same international trade houses are involved in trade in all of the major grains. In maize and soybeans, where they compete with major state trading entities, they have a very large market share; for example, three companies (Cargill, ADM and ZenNoh) account for 80 percent of US maize exports - more than half of world market trade - as well as in trade from other countries. In international wheat and palm oil trade, their role is much smaller than that of the major two state trading entities, the Australian and Canadian Wheat Boards, and the Malaysian Government-led palm oil export schemes. Rice trade is much less concentrated: prices are highly volatile and trade is therefore relatively risky. As a consequence, the turnover in rice trading companies is high; companies that dominate in one period are likely to have lost their dominant position, or have even disappeared, a decade later.

Annex 4 gives a description of the major international trade houses involved in cereals and vegetable oilseeds and oils trade.

B. Grain-exporting state trading entities

The Uruguay Round Agreement defines State Trading Entities (STEs) as “governmental and non-governmental enterprises, including marketing boards, which have been granted exclusive rights or privileges, including statutory or constitutional powers, in the exercise of which they influence, through their purchases or sales, the level or direction of imports or exports.”^[7] In other words, STEs do not need to be state-owned. Grains and dairy products are the chief exports of the agricultural STEs reported by the World Trade Organization (WTO): 16 STEs export wheat and 10 export dairy products. The following are the main STEs involved in grain exports:

• Wheat: the Canadian Wheat Board and Australian Wheat Board together account for some 30-40 percent of world wheat exports. The Trading Corporation of Pakistan sometimes also exports wheat.

• Maize: the Jilin Grain Group Import & Export Co. in China is a major maize exporter. The China National Cereals Oils and Foodstuffs Import and Export Corporation (COFCO) also exports maize.

• Rice: STEs account for a major part of world rice exports. Viet Nam’s Northern and Southern Food Corporations (Vinafood I and II) dominate the country’s rice exports, alongside a number of other government entities and private enterprises. In China, COFCO is the largest rice exporter, accounting for one tenth of world trade. The Grain Division of the Department of Foreign Trade of Thailand has seen its share in the country’s exports steadily declining, to less than 10 percent of the total. Other STEs involved in rice exports include SunRice, previously known as the Ricegrowers’ Cooperative Ltd., which has the monopoly on Australia’s rice exports as agent for the Rice Marketing Board for the State of New South Wales; China’s Jilin Grain Group Import & Export Co.; Myanmar Agricultural Produce Trading; India’s Project and Equipment Corporation; and the Trading Corporation of Pakistan.

STEs are not important in vegetable oil exports. Annex 5 contains a description of the various major grain-exporting State Trading Entities.

In the case of rice, exports by STEs are largely under government-to-government contracts, with payments often arranged under some form of counter trade. The sales by these STEs to traders are normally through tenders, with the winning bidder having to open a letter of credit before loading, with payment for the rice to be made against presentation of the shipping documents. This procedure is also used for China’s maize exports.

The situation for wheat sales by STEs is different: while most of the sales are still against letters of credit (with payment to be made on presentation of the shipping documents), cash against documents (CAD) sales are more common. Both the Canadian and Australian Wheat Boards have a number of credit programmes.

Canada’s credit programmes are the most elaborated, even though 85-95 of its annual sales are still under CAD or letter of credit arrangements. The Canadian Wheat Board (CWB) has two main programmes:

• The Credit Grain Sales Program caters for sales to government agencies or other customers who can provide a sovereign guarantee of repayment to the CWB from their Central Bank or Ministry of Finance. In 2000/2001, this accounted for C$223 million of credit sales, compared to C$372 million the previous year. Repayment terms are from 6 to 36 months, and the interest rate is set a few percent above the rates the CWB pays on the notes it issues. Some of the CWB's credit customers in the past have included state companies in Algeria, Brazil, China, Egypt, Ethiopia, Haiti, Indonesia, Islamic Republic of Iran, Iraq, Jamaica, Pakistan, Peru, Poland, the Russian Federation and Zambia. The federal Government fully guarantees the credit receivables of the CWB at no cost to the board. Credit limits for the CWB are set by the Government, after taking into account the advice provided by the Department of Finance and others. In the event of non-payment by a sovereign customer, the usual course is for the debts to be worked out at the Paris Club, an informal group of official creditors that addresses the debt problems of developing countries. Of approximately C$110 billion in sales made by the CWB over the years (not adjusted for inflation), roughly $17 billion were made on credit^[8], and about $13.1 billion remained unpaid in mid-2001. Unpaid loans are usually rescheduled, over long periods and at a low interest rate, so shortfalls in payment of principal and interest are simply added on to the credit line. To accommodate this, the relevant credit limits are then increased. Where this leads to a partial debt write-off, the Government pays CWB the sum concerned.

The Agri-food Credit Facility, was set up in 1995 by the Export Development Corporation (EDC) “to compete with foreign export credit programs, or to combat those programs”. It covers the credit risks of sales to private importers who cannot provide a guarantee from their government. The CWB is the main beneficiary of this facility, which accounted, in 2000/2001, for C$159 million of its credit sales (either directly or through accredited exporters), compared to C$146 million the previous year. These amounts are significant in the context of the revolving fund proposal (see Chapter VI), and are symptomatic of the unpredictability in food import financing. The Canadian government guarantees, free of charge, 98 percent of the credit risks of these transactions. There are no individual country ceilings for these transactions, each transaction being considered on a case by case basis. This facility falls under the EDC’s credit insurance programme, which has allocated 70 percent of its C$1 billion ceiling to the CWB.

The level of coverage provided by the Government or the EDC ranges from 100 percent to 92 percent depending on the type of customer and the repayment term of the credit. The CWB is also able to arrange credit sales outside these programmes. For example, in the late 1990s, it made sales to Indonesia and the Democratic People’s Republic of Korea^[9] in which the credit risk was not covered by one of the above programmes, but was assumed by a commercial bank, without recourse to the CWB. This was basically a receivables discounting: CWB assigns its foreign receivables to a Canadian bank which pays the cash value; this bank is then responsible for collecting the payments, with credit insurance provided by the EDC. Another example is sales by the CWB through local warehouses: the CWB can move wheat to warehouses in the importing country, and then deliver the wheat to a local buyer against receipt of an acceptable credit instrument, or cash payment.

Even though credit sales account for the minority of export sales by the Australian and Canadian governments, these governments clearly recognize the importance of providing credit facilities - or in other words, they recognize the fact that access to credit can be a bottleneck for developing country importers, particularly in difficult times. In Australia, the Cabinet may decide to make credit available for grain exports through a special "national interest window"; it did so in 1998, providing additional export credit insurance cover for exports of around four million tonnes of Australian wheat to Indonesia and the Republic of Korea. According to Australia’s Minister of Trade: "This decision clearly demonstrates the Government's commitment to the Australian wheat industry and will ensure that AWB Limited has the marketing tools at its disposal to build on the successes of 1997/98."^[10]

C. Private importers

The worldwide trend toward privatization of the grain importing industry, as exemplified by countries such as Cape Verde, Egypt, Mauritania, Morocco, Senegal and Sri Lanka, has led to changes in buying habits. STEs bought foodstuffs in large bulk quantities and usually handled and controlled all imports, storage, distribution and sales in a particular country, with the government often guaranteeing payment and foreign currency risk. Traders and processing mills in these countries are less able to afford large purchases than their government-owned predecessors, and are consequently buying in smaller lots, often on a more orderly schedule. Credit risks for foreign suppliers have increased significantly.

With a small number of exceptions (discussed in the following section), by and large, private traders are now responsible for importing food. They tend to get little assistance from their own government in obtaining the funds for this. Most countries have now freed exchange controls, so hard currency is no longer centrally located, and importers have to procure it by themselves. In most cases, private traders are locally owned. The local, private traders may be fairly large in local terms, but tend to have limited experience (until a few years previously, the government arranged food imports), and financial strength. They are generally diversified, importing the whole range of bulk food commodities, and often other products as well. A few large international traders (e.g. Singapore-based Olam) have set up what amounts to barter operations in developing countries, bringing rice and other foodstuffs into the country and using the proceeds to buy commodities for export.

Even when imports are in private hands, the government still plays a large role. One example of this is Yemen, where imports are made through government tenders, which are open only to Yemeni private traders. The private traders do all the arranging for the imports, which are in turn sold to government-licensed distributors. Sales proceeds are turned over to the Ministry of Finance, which pays the importer a pre-negotiated fee for arranging the importation and sale of the commodities to the distributors.

D. State-owned food import agencies

Over the past decade, most government-owned food import agencies have been disbanded; some have been exposed to competition and now function alongside private-sector traders (e.g., Mauritius); a few (discussed below) have remained in a monopoly position. In some countries, particularly in North Africa, trade has been privatized, but the government retains an umbrella function over the imports of the key commodities (cereals, sugar, vegetable oils), providing a certain amount of financing, imposing prices and giving subsidies. Annex 6 provides a description of the major state-owned food import agencies.

Most of the state entities buy through public tendering, even if this is known to be an inefficient mechanism for food trade. For buying commodities which requires relatively quick decisions, public tendering is an inadequate purchasing method. If new suppliers participate in the bidding there is usually little time to check on the reliability and financial status of the firms and the risk exists that unreliable companies participate in the bidding. Bonds are no guarantee for performance of contracts if the loss on the bond is less than the profit which an unreliable company could make by selling the product in a bullish market. Non-performance of contracts is happening regularly in commodity markets, in particular at times when markets are volatile. Moreover, the long periods between the launching of tenders and the award of contracts affect the costs of the products. The longer those periods, the higher are the costs of bid bonds which suppliers have to provide. Given the delays inherent in the tender process, suppliers can be expected to build protection into their offered prices which may approximate several US dollars per tonne.

State entities tend to buy in large volumes, and ask the winning bidders to put up performance bonds, for up to 10 percent of the value of the goods. Except for rice, where payment on arrival of the goods in the country, against presentation of documents (CAD) is common, they normally pay through letters of credit, with payment at shipment of the goods raising the necessary funds from local or international banks which benefit from government guarantees. For example, in August 2001, Malawi’s National Food Reserve Agency borrowed US$33 million from South Africa’s ABSA Bank, at a low 4 percent interest rate, to import a planned 150 000 tonnes of maize from South Africa. In some cases, they may obtain direct credits from foreign suppliers. Payment arrangements can be more complex. For example, for Zambian government tenders, the supplier is supposed to deliver maize to a private mill, which has to pay for it at the official (subsidized) price. On top of the purchase price paid on delivery of maize to the designated mills, the supplier than has to obtain the subsidy payment, paid out of the general government budget - so he has to take both commercial and sovereign risk. While the former can be managed through techniques such as warehouse receipt finance, the latter can be a serious obstacle.

In all these cases, the buyers carry most of the burden of financing - at least until the goods arrive in the country, and often even longer than that because under government instructions, they have to sell on credit to local processors or distributors. Some may be able to finance themselves through dedicated loans; others rely on expensive bank overdrafts. Only rarely are they able to raise offshore finance to fund their imports.

E. Commercial banks

Commercial banks in the exporting countries play, as can be expected, a large role in the payment flows of international food trade. They also provide a large part of the credit that enables the bulk food imports by NFIDCs and LDCs. The mechanisms they use will be further discussed in Chapter III.

One important way for them to provide such funding is through credit provided to international traders. Because international traders tend to leverage their own capital to a strong extent - their annual turnover may be 20 times or more as high as their capital - it is more appealing for banks to finance against the goods that the traders are handling rather than against the traders’ balance sheet. There is a remarkable variety in the actual practices of commercial banks in this domain. It is useful to distinguish three parts of the food trading cycle: pre-shipment; on the ship; and post-shipment.

• With respect to pre-shipment finance, traders in OECD countries can generally finance the goods they hold with little or no difficulty. Elsewhere, pre-shipment finance can be a problem unless the government arranges suitable facilities (as, for example, the Government of Thailand does). The lack of pre-shipment finance is one of the major bottlenecks for the intra-African grain trade: it is difficult for local traders to obtain the credit needed to collect the grains (or oilseeds) destined for export.

• Once goods are charged onto a ship, finance can become difficult even for OECD origin countries. Many international banks are not willing to have any exposure to cargoes on high seas: they will provide pre-finance only if the goods are already sold, and a letter of credit (L/C) has been opened by acceptable foreign banks (which, in effect, means that their finance is against their available country and bank credit lines). In addition to this, they generally take consignment of the cargo under a non-negotiable bill of lading.

  When the cargo is not pre-sold, only some of the few banks specialized in financing international agricultural trade are willing to finance the goods on high seas (this applies particularly to rice, which often finds a buyer only after it has been on the ship for several weeks). In general, banks which have such specialized operations provide credit lines to traders for up to 90 percent of the value of the goods, on which the latter can draw up to a certain limit, on the basis of shipping documents to be pledged to the bank. If commodity prices increase strongly or traders experience a slow-down in their turnover (as has been the case, for example, in West Africa since September 2002, when problems in Côte d’Ivoire led traders to re-route their rice cargoes to other ports which quickly became congested), the credit limit for traders can become a constraining factor for international trade. In some cases, the bank may resort to a “repo financing”, a mechanism in which the bank becomes the owner of the goods, with an option for the trader to buy them back once they arrive in the port of destination. In this case, the credit exposure does not count towards the trader’s credit limit. Only a few banks engage in this business, because of the need to manage price risk, and then only with large international trading houses.

• Once the goods arrive, the financing burden is often entirely on the receiving country. The main exception is warehouse receipt finance, in which international traders extend their access to international finance into the country (banks generally increase their “margin”, the share of the value of the goods that the trader has to cover himself, to, for example, 15-20 percent). This still counts as country risk and corporate risk (towards the trader) for the international bank, which means that credit lines for such finance are limited by country and corporate credit lines. The mechanisms are discussed in the next chapter. In some cases, international banks may also be willing to finance local importers, in particular if these can provide a government guarantee.

Commercial banks in importing countries are heavily involved in the payment flows of food financing. The two main payment mechanisms in international food trade are documentary collection, and letters of credit (L/Cs). Documentary collection can be an acceptable payment procedure for large buyers. The banks will simply follow the payment instructions of the buyer. If a reputable local bank adds its aval on the draft of the documentary collection, the international trader can sell the draft relatively easily on the secondary market (but within the constraints of the secondary market’s ability to take on country or bank limits). More frequently, banks will open a letter of credit on behalf of the importer in favour of the seller. Such L/Cs ensure that if the exporter ships the products and delivers to the bank the documents specified in the L/C demonstrating shipment according to the contract, the bank will make the payment.

However, while developing country banks play a major role in ensuring the payment flows, they are much less active in providing credits, for a number of reasons:

• The counterparty risks of their own domestic importers may be, somewhat ironically, more difficult to manage for them than for foreign banks, because they do not have access to local credit insurance agencies. For example, US exporters can sell to a foreign buyer against a simple promissory note, indicating that some time in the future the buyer will pay. The exporter will be able to insure 65 percent of the implied payment risk under a programme of the US Department of Agriculture; in the importing country, but it is likely that a local credit provider will be unable to obtain such insurance.

• Interest rates in most developing countries are high, and local banks can not provide finance at attractive rates, in local or in foreign currency.

• In a number of countries, governments have decided that local banks need to be “protected” against their own imprudence, and do not allow them to open L/Cs for imports unless they receive a 100 percent cash collateral from the party that applies for the L/C (usually, the importer) In some countries, the importer may be obliged to provide hard currency collateral, not just the local currency equivalent. This may seem a remarkable intervention for a government to make, for it forces the local importer, whose cost of capital may be very high, to start financing the goods many weeks before he actually receives them, perhaps even before they are shipped. The procedure has its roots in the arguably poor lending practices of local banks in the recent past.

Nevertheless, domestic banks may provide import finance to some of the larger food importers, in particular if these are processing plants (and thus, have plenty of physical collateral), or if they are state entities (in which case the banks may have little choice in the matter). Contrary to the practices of international banks in providing finance to food importers, such finance, where it exists, appears mostly to be balance sheet finance - in other words, the banks take a pure credit risk on the borrower - rather than finance secured by the underlying flows of food products.

F. Export credit and insurance agencies, and export-import banks

All the large western countries support their agricultural exports through a mix of subsidies, export credits and export credit insurance. The ECAs (Export Credit Agencies) and ExIm (Export-Import) banks are export-promoting agencies from run mainly by the government (but they can also be semi-governmental or private agency).

Export credits and export credit insurance have often been ways to provide hidden subsidies to exporters (although naturally, some governments claim they are merely commercial programmes designed to overcome credit bottlenecks in export trade). Negotiations in the framework of the General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO) have curtailed the possibilities of governments to give direct subsidies, which has made these indirect methods more important. As noted by one observer, “With export subsidy programs limited by WTO commitments and food aid constrained by budget resources and other factors, export credits are in effect, the only significant policy tool to increase US exports.”^[11]

The Uruguay Round did not establish effective disciplines on export credit programmes, but made a commitment to future work in this area:

Members undertake to work toward the development of internationally agreed disciplines to govern the provision of export credits, export credit guarantees or insurance programmes and, after agreement on such disciplines, to provide export credits, export credit guarantees or insurance programmes only in conformity therewith. (Agreement on Agriculture, Article, paragraph 2)

Such work started immediately after the closure of the Uruguay Round in 1994, in the framework of the Organisation for Economic Cooperation and Development (OECD). In order to reduce the likelihood of excessive competition between OECD countries by means of export credits and credit insurance, the OECD export credit agencies had already adopted a “Consensus Agreement” (the Arrangement on Guidelines for Officially Supported Export Credits) which, however, does not apply to the agricultural sector. The discussions now focused on how to adapt the principles to agricultural export credits and credit insurance. So far, there has been no agreement among OECD governments.

For the time being, the WTO agreement does not constrain export credit practices for agricultural products. Export credits for industrial products are regulated by the WTO Agreement on Subsidies and Countervailing Measures (SCM), which prohibits export subsidies, including subsidized interest rates and "the provision by governments... of export credit guarantee or insurance programmes... at premium rates, which are inadequate to cover the long-term operating costs and losses of the programmes" (SCM Annex I paragraphs j and k)

However, an export credit practice will not be considered an export subsidy if the arrangement is in compliance with the OECD agreement. Agricultural export credit and credit insurance are likely to be included during the Doha round of negotiations, unless the discussions in the framework of OECD prove more successful. Governments cannot afford to leave the issue aside, because of the "non-circumvention provisions" of Article 10 of the WTO Agreement on Agriculture. Under these provisions, export subsidies not subject to specific reduction commitments (which include export credit programmes) cannot be used in a manner that results in circumvention of the agricultural export subsidy commitments. Therefore, granting export credits or credit guarantees to a product in excess of the WTO-bound export subsidy commitment level, or food aid which does not meet the specific criteria of the WTO, would be a violation of WTO obligations.

These discussions and negotiations are likely to lead to stricter rules on such credits and insurance. Discussions are ongoing. For example, in November 2002, the US proposed the following:

• Agricultural credits need to be repaid in 180 days for exports to developed countries, and in 30 months for developing country recipients. Emergency exceptions, to respond to a sudden, significant and unusual deterioration in a recipient country’s economy would be possible.

• Interest rates should not be below the costs of capital borrowed on international markets

• Strict notification requirements would be in place.^[12]

The US is the major provider of official export credits and credit insurance for agricultural exports, but it is also commonly used in other OECD countries and is increasingly important in developing markets. In countries where they exist, ECAs often support around 10-20 percent of the country’s exports. Out of the US$300-350 billion worth of short-term trade insured each year, 80 percent covers consumer products, foodstuffs, raw material and commodities.

ECAs and ExIm banks generally cover political risk, such as war or political disturbances in the importer's country, blockage or delay in the transfer of funds and imposition of import restrictions or cancellation of the import license. In many cases, they also cover commercial risk: coverage is provided in the event the importer becomes insolvent, fails to pay, or refuses to take delivery of goods for no justifiable reason. Commercial risk can be distinguished from political risk according to the reasons for an overseas buyer defaulting:

(i) he is not able to make the required payment (deposit) in the local currency to his central bank or a commercial bank. This is commercial risk;

(ii) he has deposited the payment in local currency, but the conditions in his country make it impossible for him to convert that amount into hard currency; or, if he can convert it, to export the hard currency from the country. This is political risk.

Figure 2: Credit insurance

Various credit insurance systems exist, and are summarized in Figures 2 - 4. The simplest system (Figure 2) is that used by the United States in its PL480 programme, where it gives a direct long-term credit at preferential rates to allow a foreign government to buy grains and other foodstuff in the US. The most prevalent system is that of export credit insurance, where an export credit agency (government-owned or private) covers the credit risk that a seller takes towards a buyer. In most cases, the credit insurance will cover both commercial and political risk; as a corollary to this, it is mostly available for sales to large, well-reputed buyers. Such credit insurance is provided by ECAs and ExIm banks in Australia, Brazil, Canada, France, Germany, Thailand and the United States. Where the ECA is a private entity, the government may re-insure it for certain large risks, if it feels the national commercial or political interest is at stake (there are such special re-insurance windows in Australia, France and Germany).

Figure 3: Facilitating bank finance for the exporter

Another common system focuses on the seller’s bank (Figure 3). As in the previous scheme, the seller provides a credit, e.g. through a promissory note, to an overseas buyer. He does this under a credit line provided by his bank; his bank, in turn, can refinance itself cheaply with a government bank (e.g. in Brazil, Pakistan and Thailand), or can obtain a credit risk coverage from a government agency (e.g. Malaysia’s ECR scheme or the United States’ SCGP programme). In these schemes, the seller retains a large credit risk vis-à-vis the buyer: he has to reimburse his bank for all or part of his credit (e.g. 35 percent in the case of the US SCGP programme) even if the buyer defaults.

In a third model (Figure 4), the credit scheme works through the buyer’s bank. In this case, one or more banks in the importer’s country are approved as credit counterparties under a scheme from the exporting country’s government. These banks can obtain a credit line either from a commercial bank in the exporter’s country (e.g. the United States’ GSM scheme); or directly, from the exporter’s ExIm bank (e.g. Brazil’s BNDES programme and Malaysia’s MECIB scheme). In these schemes, the seller is paid on delivery by a bank in his own country, which will be reimbursed over a period of up to three years by an overseas bank. The overseas bank will be reimbursed by the buyer, over a period and at conditions that may or may not coincide with the conditions provided by the seller’s bank. As the buyer’s bank takes a credit risk vis-à-vis the buyer, he will normally ask for collateral from the buyer (at times, even a 100 percent collateral, which in practice can make this model unattractive, or out of reach of most importers).

Figure 4: Working through the buyer’s bank

In practice, the schemes illustrated in Figure 3, notably those provided by the US Department of Agriculture (USDA) under its GSM-102 programme, require the importer to open an irrevocable hard currency letter of credit. USDA has, for the main importing countries, a publicly available list of “approved local banks” whose letters of credit will be accepted for the purpose of GSM-102 insurance (within preset country limits). This means that the US Government is taking the credit risk on these banks.

Without this insurance programme, exporters would have to find one of their own country’s banks willing to take a risk on the foreign bank, and to confirm that bank’s letter of credit. Apart from the relatively high confirmation fees and at times, the sheer difficulty of finding a bank which still has capacity towards that particular foreign bank, this has two important disadvantages: firstly, the available credit risk limit may be quite low, and even if a particular food export transaction still fits within the limit, the bank may not want to freeze up the rest of its operations with that bank; and secondly, such bilateral bank relations are notably fickle, with credit limits vulnerable to factors that may have nothing to do with the particular bank in the developing country, or even with its country (if a transaction goes wrong in a neighbouring country, a credit committee can decide that the region as a whole is too risky).

Annex 7 gives a detailed description of the various ECA and ExIm programmes operated by grain and vegetable oils exporting countries.