Identifier
Created
Classification
Origin
09ASMARA212
2009-07-01 14:28:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Asmara
Cable title:
GSE SCRAPES UP FOREIGN CURRENCY FOR WHEAT
how-toVZCZCXRO3821 RR RUEHROV DE RUEHAE #0212 1821428 ZNR UUUUU ZZH R 011428Z JUL 09 FM AMEMBASSY ASMARA TO RUEHC/SECSTATE WASHDC 0353 INFO RUCNIAD/IGAD COLLECTIVE RHMFISS/CDR USCENTCOM MACDILL AFB FL RUEAIIA/CIA WASHDC RUEPADJ/CJTF-HOA J2X CAMP LEMONIER DJ RUEKDIA/DIA WASHDC RUMICEA/JICCENT MACDILL AFB FL RHEHNSC/NSC WASHDC RUEKJCS/SECDEF WASHDC RHRMDAB/COMUSNAVCENT RHMFISS/HQ USAFRICOM STUTTGART GE
UNCLAS ASMARA 000212
SENSITIVE
SIPDIS
LONDON AND PARIS FOR AFRICA WATCHERS
DEPT FOR AF/E AND EEB/CIP/BA
E.O. 12958: N/A
TAGS: ECON EAGR PREL PGOV ER
SUBJECT: GSE SCRAPES UP FOREIGN CURRENCY FOR WHEAT
REF: ASMARA 065
UNCLAS ASMARA 000212
SENSITIVE
SIPDIS
LONDON AND PARIS FOR AFRICA WATCHERS
DEPT FOR AF/E AND EEB/CIP/BA
E.O. 12958: N/A
TAGS: ECON EAGR PREL PGOV ER
SUBJECT: GSE SCRAPES UP FOREIGN CURRENCY FOR WHEAT
REF: ASMARA 065
1. (SBU) The Government of the State of Eritrea (GSE) recently
completed a $6.5 million transaction with the Minnesota-based
international grain distributor Cargill. The GSE sent $5.5 million
to Cargill from the Commercial Bank of Eritrea earlier in June as
the final payment for 28,000 tons of wheat shipped to the country
three months ago. . Eritrea also placed an approximately $8 million
order for 14,000 tons of sugar in early June.
2. (SBU) Eritrea has a $40 million revolving line of credit with
Cargill and is the only African country with which Cargill does
business without having the guarantee of an outside bank. According
to Eritrea's Cargill representative, at least a dozen banks in
Europe refused to back Cargill for business deals in Eritrea when
Cargill first ventured to work with Eritrea several years ago.
Despite this setback, Cargill proceeded to supply Eritrea and has
since viewed Eritrea as its sole reliable partner in Africa.
3. (SBU) Cargill attributes Eritrea's reliability to its overly
cautious nature. The representative claimed Eritrea has lost the
opportunity to purchase grain at lower prices by waiting until it
had enough foreign currency in the coffers to pay in full. As to
where the GSE obtains its foreign currency, he referred to it as
"another matter."
4. (SBU) COMMENT: Eritrea has stiffed creditors in the past and most
likely cannot purchase commodities on credit. As seen with the fuel
industry, the GSE is able to scrape up foreign currency, albeit at
the last minute, to meet its operational needs (reftel). However,
as the country continues to fall on hard times (no rain, few summer
visitors, increasing political alienation),it is not likely the GSE
will be able to keep up its last minute payments.
MCMULLEN
SENSITIVE
SIPDIS
LONDON AND PARIS FOR AFRICA WATCHERS
DEPT FOR AF/E AND EEB/CIP/BA
E.O. 12958: N/A
TAGS: ECON EAGR PREL PGOV ER
SUBJECT: GSE SCRAPES UP FOREIGN CURRENCY FOR WHEAT
REF: ASMARA 065
1. (SBU) The Government of the State of Eritrea (GSE) recently
completed a $6.5 million transaction with the Minnesota-based
international grain distributor Cargill. The GSE sent $5.5 million
to Cargill from the Commercial Bank of Eritrea earlier in June as
the final payment for 28,000 tons of wheat shipped to the country
three months ago. . Eritrea also placed an approximately $8 million
order for 14,000 tons of sugar in early June.
2. (SBU) Eritrea has a $40 million revolving line of credit with
Cargill and is the only African country with which Cargill does
business without having the guarantee of an outside bank. According
to Eritrea's Cargill representative, at least a dozen banks in
Europe refused to back Cargill for business deals in Eritrea when
Cargill first ventured to work with Eritrea several years ago.
Despite this setback, Cargill proceeded to supply Eritrea and has
since viewed Eritrea as its sole reliable partner in Africa.
3. (SBU) Cargill attributes Eritrea's reliability to its overly
cautious nature. The representative claimed Eritrea has lost the
opportunity to purchase grain at lower prices by waiting until it
had enough foreign currency in the coffers to pay in full. As to
where the GSE obtains its foreign currency, he referred to it as
"another matter."
4. (SBU) COMMENT: Eritrea has stiffed creditors in the past and most
likely cannot purchase commodities on credit. As seen with the fuel
industry, the GSE is able to scrape up foreign currency, albeit at
the last minute, to meet its operational needs (reftel). However,
as the country continues to fall on hard times (no rain, few summer
visitors, increasing political alienation),it is not likely the GSE
will be able to keep up its last minute payments.
MCMULLEN