Reuters logo
US food sales to Cuba seen boosted by pending law
February 27, 2009 / 12:13 AM / 9 years ago

US food sales to Cuba seen boosted by pending law

HAVANA, Feb 26 (Reuters) - Pending U.S. legislation aimed at easing the 47-year-old trade embargo against Cuba should boost food sales to the communist-led island, but increases will be limited until the embargo is fully lifted, experts in U.S. and Cuba said on Thursday.

Legislation passed by the U.S. House of Representatives on Wednesday and now awaiting a vote in the Senate would eliminate some of the obstacles to trade created by the embargo and toughened under former President George W. Bush.

While the proposed law is not a panacea for what ails U.S.-Cuba trade, it would make it somewhat easier, said Pedro Alvarez, head of Cuba’s state-run food importing monopoly Alimport.

“Everything they do toward lifting the embargo would benefit the United States and Cuba,” he told Reuters. “We have never blocked U.S. companies from doing business with us. It is their own government that is doing that.”

Cuba began importing U.S. agricultural products under a 2000 amendment to the trade embargo allowing purchases for cash.

Trade dipped after the Bush administration modified the rules in 2005 to require that Cuba pay in cash before ships left U.S. ports, instead of upon arrival in Cuba, complicating trade and adding to costs.

Food sales came back, reaching a record $710 million last year amid soaring commodity prices, but some, such as rice, did not recover in the face of tough competition from Vietnam, Cuba’s main rice supplier, and other Asian countries.

The House bill would prohibit the Treasury Department from enforcing the Bush regulations, make it easier for U.S. marketers and sellers to go to Cuba and at the same time ease limits on family visits and remittances sent to relatives in Cuba.

SIGNIFICANT BOOST

Marvin Lehrer, senior adviser on Cuba for the USA Rice Federation, said the proposed changes could provide a significant boost for U.S. rice sales to Cuba.

The island, just 90 miles (140 km) from Florida, imports about 600,000 tonnes of rice, making it the second-largest importer of rice in the hemisphere after Mexico.

Before the embargo, Cuba was the largest export market for U.S. rice.

In 2004, the United States shipped 175,000 tonnes of rice to Cuba, which was about 30 percent of its total demand, Lehrer said.

But the Bush regulations caused sales to plummet to 12,600 tonnes in 2008. Removing those obstacles could return sales to 25 to 30 percent of Cuba’s rice consumption, he said.

“We have logistic and transport advantages over Far East suppliers to Cuba. They also prefer the quality of U.S. rice,” he said.

With countries such as Vietnam providing preferential financing to Cuba, Lehrer thinks the United States can only reach part of its rice potential in Cuba until the embargo is fully lifted.

“Open trade and travel would bring our share of imports to 50 percent,” he said.

The proposed legislation is tucked into a larger spending bill, under which most of the changes would expire on Sept. 30 unless extended by Congress or President Barack Obama.

The bill still must be passed in the Senate where it faces stiff opposition, then would have to be signed by Obama.

Alvarez said that tweaking regulations would not be enough to significantly increase U.S. food sales to his country, but agreed that elimination of the embargo could make a big difference.

“We are not China, but could be an important market close to home,” he said. “Every little bit of trade would help struggling U.S. farmers and companies as well as Cuba in these hard economic times.” (Editing by Jeff Franks and Mohammad Zargham)

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below