No, the headline is not an exaggeration. And it demonstrates that credit conditions remain tight for many less than stelar borrowers.
From the Financial Times:
In a striking example of how the global financial crisis and high food prices have strained the finances of poor and middle-income nations, countries including Russia, Malaysia, Vietnam and Morocco say they have signed or are discussing inter-government and barter deals to import commodities from rice to vegetable oil.
The revival of these trade practices, used rarely in the last 20 years and usually by nations subject to international embargoes and the old communist bloc, is a result of the countries’ failure to secure trade financing as bank lending has dried up.
The countries have not disclosed the value of any deals, and some have refused even to confirm their existence. Officials estimated that they ranged from $5m for smaller contracts to more than $500m for the biggest.
Josette Sheeran, head of the United Nations’ World Food Programme, said senior government officials, including heads of state, had told the WFP they were facing “difficulties” obtaining credit to purchase food. “This could be a big problem,” she told the Financial Times….
The countries’ struggle to obtain credit to import food is boosting the price of domestic crops. Ms Sheeran said that p
rices of crops in some African countries were rising sharply even as international food commodities prices had fallen from last summer.