Cuban spending on U.S. food may decline

Posted on Tuesday, 11.03.09
TRADE
Cuban spending on U.S. food may decline
Cuba's government is estimated to spend less than $590 million on
American food in 2009 -- down at least 32 percent from last year.
BY WILL WEISSERT
Associated Press

HAVANA -- Cuban purchases of U.S. food will fall by at least a third
this year as the island slashes imports to stabilize an ever-weak
economy further hammered by the global economic crisis, a top trade
official said Monday.

Igor Montero, head of the state import company Alimport, calculated that
the communist government would spend less than $590 million on American
food in 2009 once banking, shipping and other transaction costs are
included. That's down at least 32 percent from last year's $870 million.

Montero blamed the economic crisis, but also took a swipe at
Washington's 47-year-old trade embargo, even though it exempts food,
arguing that America should begin buying Cuban products and allowing its
citizens to visit the island as tourists.

``If we aren't given more possibility to generate revenue through Cuban
exports to the United States, or an exchange of visitors, it's going to
be very difficult to continue to reach the levels of trade we've grown
accustomed to,'' Montero said.

He said 2009 will mark the first year American food imports to Cuba have
not increased since the U.S. Congress authorized direct sale of
agricultural products to Cuba in 2000.

Because of a dispute over financing, Cuba refused to import even a
single grain of rice until a hurricane caused food shortages in November
2001. After that, the United States quickly became Cuba's top source of
food and will still retain that title in 2009.

Cuban officials have begun a campaign to increase domestic food
production as falling imports have squeezed product supplies at the
country's farmers and supermarkets. But so far, those efforts have led
to little increased output.

Last year Cuba spent a record of more than $710 million for U.S.
agricultural products of all kinds -- a figure lower than the one
Montero gave because it does not include transaction costs -- according
to the New York-based U.S.-Cuba Trade and Economic Council. That was 61
percent more than in 2007, the council reported.

The spike came as Cuba stockpiled food in the face of rising commodity
prices, a strategy that backfired when three hurricanes hit the island,
damaging many of the warehouses where perishable items were stored.

Minister of Foreign Trade and Investment Rodrigo Malmierca said foreign
imports as a whole were down 36 percent to about $10 billion so far this
year, and about 80 percent of that was food.

Some 51 percent of imports come from the United States, he said, though
Cuba's top trading partner remains Venezuela, led by socialist ally Hugo
Chávez, followed by China, Russia, Spain and Brazil.

In a speech kicking off a foreign trade fair east of Havana on Monday,
Malmierca said ``complex economic factors'' have forced Cuba to delay
payments to many of its foreign suppliers. But he said that the island
``is ready to hold dialogues to fix that.''

Thirty-five U.S. businesses, most of them food, agriculture or shipping
companies, brought about 200 representatives to Cuba for the fair. Among
those here were state agriculture officials from Maryland, Virginia and
Georgia, Montero said.

Terry Coleman, Georgia's deputy commission of agriculture, said the
White House should push to modify banking regulations so that Cuba can
transfer payments from its banks to American ones without having to go
through financial institutions in third countries.

``We are hoping and praying for a real approach to trade,'' he said.
``Normal trade is direct. You buy, you send the products to the ships
and there's no middle man.''

Cuban spending on U.S. food may decline - Cuba - MiamiHerald.com (3
November 2009)
http://www.miamiherald.com/news/americas/cuba/story/1313282.html