CubaTrade-January-Flipbook

AGRICULTURE
Composition of U.S. Food and Agricultural Exports to Cuba: 2000 to 2016
700
Millions US$
525
350
175
Millions US$
Composition of U.S. Food and Agricultural
Exports to Cuba: Jan-Sept 2016 and 2017
225
150
75
10 commodities contribute
$10 bilIion to Louisiana’s economy.
Imagine what it could do for Cuba.
0
2002
0
2004 2006 2008 2010 2012 2014 2016 Jan-Sept 2016 Jan-Sept 2017
Source: USDA, GATS database
Source: USDA, GATS database
U.S. Food and Agricultural Exports to Cuba: 2000 to 2016
800
Bulk
Intermediate
Consumer Oriented
Millions US$
600
400
200
U.S. Food and
Agricultural Exports
MARINE FISHERIES FORESTRY RICE POULTRY SOYBEANS
0
2002
2004 2006 2008 2010 2012 2014 2016
Source: USDA, GATS database
important observation is that the composition
of Cuba’s purchases from the
United States began to change in 2016,
with a sizeable increase in the value of
bulk commodity sales to Cuba (Figure 2).
This was a welcome development for bulk
agricultural shippers in the United States,
whose sales had risen steeply from almost
nothing in 2001 to over $400 million
in 2008, only to collapse to a mere $15
million in 2015.
In 2017, Cuban purchases of U.S.
food and agricultural products have
continued to increase. Through the first
nine months, U.S. sales to Cuba were 28
percent higher than they were during the
same period in 2016. And the trend of increased
sales of bulk commodities continued
in 2017, with sales of consumer-oriented
products also on the rise (Figure
3). Conversely, U.S. sales of intermediate
commodities – those used to produce other
goods – declined significantly, continuing
a trend that started in 2013.
Growth in consumer-oriented product
30 CUBATRADE JANUARY/FEBRUARY 2018
sales to Cuba is made up almost entirely of
sales of poultry meat. In fact, poultry meat
has been the largest product category of
sales to Cuba every year since 2009 except
one (2011, when the value of corn sales to
Cuba exceeded that of poultry meat). Since
2014, poultry meat has made up more than
half of the total value of U.S. food and
agricultural product sales to Cuba.
While all of those product sales are
showing trends welcomed by U.S. agricultural
exporters, Cuba is importing
close to $2 billion per year of food, so
the United States only holds a 10 to 15
percent market share. This stands in stark
contrast to 2004, when the United States
held about 40 percent share of Cuba’s total
food imports.
Today’s decline is partly attributable
to a tightening of the terms of TSRA,
which stipulated that Cuba pay cash for
its purchases from the United States. This
already put U.S. sellers at a competitive
disadvantage over suppliers from other
countries who could offer credit (indeed,
some countries have been offering Cuba
terms of 12 or even 24 months for their
food purchases.) Under the George W.
Bush administration, those terms were
made more stringent, requiring advance
payment through non-U.S. banks.
In the face of such challenges, it
is difficult for U.S. farmers to compete,
particularly given Cuba’s cash-strapped
economic situation. Nevertheless, the fact
that Cuba continues to purchase from
U.S. suppliers is an encouraging sign. Also,
Cuba is preparing to export more charcoal
and coffee to the United States – two
commodities that can legally be shipped
from “independent” producers in Cuba.
Together, these trends could indicate that
food trade might, perhaps, foster continued
and strengthening relationships
between entities in the United States and
Cuba, even as U.S.-Cuban diplomatic
relations unravel. H
Willam A. Messina, Jr. is an agriculture
economist at the University of Florida
COTTON AQUACULTURE BEEF CATTLE FEED GRAIN HORSES
Louisiana –The Trade Gateway to Cuba
866.927.2476 • ldaf.state.la.us