The Miami Herald
Oct. 01, 2003

U.S. exports account for largest chunk of food product purchases

Last year, deals and contracts worth $92 million were negotiated. Another $159 million worth of items have since arrived.

  BY NANCY SAN MARTIN

  One year after an unprecedented trade show attracted 288 American exhibitors to Cuba, experts say the United States has become the island's largest source of imported food and agricultural products, with sales totaling more than $250 million since last September.

  During that five-day U.S. Food and Agribusiness Exhibition in Havana, the exhibitors from 33 U.S. states set up booths overflowing with food samples as negotiators worked behind the scenes to snag business deals in a market that had been closed for decades.

  U.S. executives walked away with signed deals worth some $92 million. Since then, at least another $159 million worth of American products have made their way to Cuba, said John Kavulich, president of U.S.-Cuba Trade and Economic Council in New York, which monitors U.S. Department of Commerce reports.

  It was the first such American trade fair in Cuba since Washington imposed a trade embargo on Cuba soon after President Fidel Castro took control of the United States' closest Caribbean neighbor 44 years ago.

  '90 MILES'

  ''The thing that makes Cuba an attractive proposition is that it is literally 90 miles from our shores, '' said Tony DeLio, vice president of marketing for Archer Daniels Midland Co., a food giant based in Decatur, Ill. "It's very easy for us to do business there. We sell hundreds of millions of dollars worth of products throughout the Caribbean. Cuba is another stop.''

  Imports from the United States accounted for about 20 percent of Cuba's total food product purchases in 2002. They are expected to increase to as much as 35 percent by the end of the year, Kavulich said. That made the U.S. Cuba's largest source of such products in 2002, ahead of China and France.

  The U.S. sales heightened enthusiasm among opponents of the trade embargo, who had hoped that American farmers would muster enough clout to pressure Washington to ease the restrictions. They also raised complaints from embargo supporters, who predicted that the U.S. goods would wind up in tourist hotels, not with the Cuban people, and would only enrich the Castro government.

  That dispute is stalled, in large part because the Cuban government's jailing of 75 dissidents six months ago, which led Washington to deny the fair's organizers a license for a new trade show this year.

  ''Should the political situation improve, for example, by the regime releasing the unfairly imprisoned opposition members or otherwise indicating its interest in reform, we would be prepared to reconsider our views regarding these types of license requests,'' said a State Department letter to 10 U.S. senators who had inquired about the license refusal.

  FLORIDA CORPORATIONS

  ''We were hoping that the second exhibition would attract a lot of new companies,'' said show organizer Peter Nathan, who noted that Florida corporations made up the largest number of exhibitors last year. ``There is great interest, but it's on hold because the U.S. government has indicated that the time is not appropriate.''

  The first direct commercial exports of U.S. agricultural products to Cuba began in December 2001, following Hurricane Michelle, which devastated the island's agricultural sector.

  They were allowed under the U.S. Trade Sanctions Reform and Export Enhancement Act of 2000, which authorized such exports on condition that the American sellers be paid in cash.

  'RATION REDISTRIBUTION'

  Contrary to initial speculation, the American products do not appear to have wound up on the buffet tables of Cuba's tourist hotels.

  ''Well over 90 percent is going into the channels for distribution for the 11.2 million citizens,'' said Kavulich, referring to Cuba's food-rationing program. "We check it, we track it, we see it . . . Most of the products are being used for the ration distribution system.''

  Kavulich said Cuba purchases consist primarily of basic commodities such as wheat and soy-related products, not the type of goods that wind up in hotels. Only about 2 percent of the U.S. goods imported end up on the shelves of Cuban stores that only accept dollars.

  Kavulich added that the future of U.S. sales to Cuba will depend on the political climate.

  ''The relationship goes from peaks and valleys,'' he said. "There will be more peaks, the question is when? The timetable is determined by the government of Cuba.''

  Lazaro Herrera, a spokesman at the Cuban Interests Section in Washington, said his government does not like the U.S. restrictions on the sales, such as the cash-only provisions, but is pleased with the business relations so far and wants to expand them.

  ''Cuba is a natural market for the United States, just as the United States is for Cuba,'' he said. "There is a mutual benefit. We are ready to continue the relations. ''