Exporters given advice on overseas buyers

Press, 7 June 1983, Page 9

Exporters given advice on overseas buyers

Parliamentary reporter Exporters insuring with the Export Guarantee Office should use “very sound commercial judgment” in choosing overseas buyers, the office said in its March 1983 report to Parliament. If they did not, the office’s losses would increase to an unacceptable level, said the report. Bankruptcies, bank insolvencies, and the credit risk associated with many overseas public and private

buyers, were increasing. Intense competition had reduced profit margins for exporters, and chances of delayed settlements were greater. Claims had increased “very substantially in cost,” and premiums had risen by 15 per cent as a result. A claims fee had also been imposed. During the year requests for insurance on contracts payable by irrevocable letter of credit had in-

creased, showing concern about the solvency of some banks and the financial and political stability of some countries. The office underwrote to a value of $24 million last year. The Export Guarantee Office returned a profit of nearly $500,000 last year. The office made a profit of $498,591 in the year to the end of December 1982, compared with a loss of $208,868 in 1981.