Tuesday, March 30, 2010

US Agricultural Exports to Cuba Fall

Tuesday, March 30, 2010

US Agricultural Exports to Cuba Fall
CUBA – Agricultural exports to Cuba declined by more than $180 million
in 2009, down from a record $715 million in exports set in 2008,
according to a Texas AgriLife Extension Service economist.

The decline was a result of a number of factors, including the U.S.
recession, which restricted money flowing from Cuban Americans back
home, lower nickel prices, a slowdown in tourism to Cuba and
restrictions on payment terms used by US exporters, said Dr Parr Rosson,
AgriLife Extension economist and director of the Center for North
American Studies at Texas A&M University.

"The lack of money being sent back home to Cuba resulted in less
purchasing power and a big drop off in exports to Cuba," he said.

"As a result, the Cuban government has decided to try to revitalize
production of rice and milk."

US exports to Cuba included corn, wheat, soybeans, oil, meal and frozen
broilers. Texas-grown commodities exported to Cuba included cotton,
wheat and broilers, according to Dr Rosson.

"The decline is a result of a combination of factors," Dr Rosson said.

"Weak economies across the globe and a reduction in expenditures by
tourists. That decline accounted for about 15 percent compared to 2008.
The collapse in world nickel prices was also a big factor. The nickel
price dropped from $24 per pound in the 2007-2008 to $7 per pound
earlier this year."

Tourism accounted for a large portion of money flowing into the Cuban
economy, with Canadians among the most popular to frequent the country.
Approximately 933,000 out of 2.4 million tourists visiting Cuba in 2009
were Canadian.

"The beaches are a big draw during the wintertime," Rosson said. "(From
Canada) there are direct flights and all-inclusive packages at the major
beach resort, Varadero."

Agricultural commodities imported into Cuba that support the tourism
industry include beef steaks, chicken and pork, Dr Rosson said.

However, exports to Cuba could recover somewhat in the future. The
country's vegetable crops were wiped out by three hurricanes in 2008 and
are struggling to recover, and US payment terms have been revised,
allowing US exporters to be more competitive, Dr Rosson said.

"That's why Cuba had such a large import bill in 2008," he said.

"That, coupled with the decline of tourism and lower nickel prices means
the government is having difficulty importing foods. As a result, US
corn, wheat and soymeal exports to Cuba were all off by at least 50 per
cent for the first two months of 2010 compared to 2009."


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