Texas agriculture producers, businesses have opportunity to capitalize on potential food exports to Cuba, Texas AgriLife Extension Service economist says; U.S. corn exports to Cuba grew 200% in 2011 to value of US$109M during January-November period
COLLEGE STATION, Texas
February 6, 2012
– Though tightly controlled, there are opportunities for Texas agricultural producers and businesses to capitalize on potential exports of food products to Cuba, according to a Texas AgriLife Extension Service economist.
Dr. Parr Rosson, AgriLife Extension economist and director of the Center for North American Studies at Texas A&M University in College Station, said the Cuban economy has held its own amid world economic turbulence.
Thanks to the Trade Sanctions Reform and Export Enhancement Act of 2000, U.S. businesses may export food, agricultural and forestry products and medicines to Cuba.
Texas supplies Cuba with several export items, including chicken leg quarters, corn and wheat. U.S. corn exports to Cuba saw more than a 200 percent increase in value in 2011 to $109 million during the January-November period as Cuba uses more corn products for poultry feeding operations and other uses.
“We’ve begun to see some higher quality beef cuts enter the Cuban market as well,” Rosson said. Pork, cotton and dairy products produced in Texas are also exported there.
“Pears, apples, raisins and dry (pinto) beans were exported in 2011, along with corn chips and potato chips,” Rosson said. “These are products that we are seeing more interest in due to the growing tourism market in Cuba.”
International visitors are increasing, Rosson said, with 2.7 million traveling to the island in 2011, 7 percent above 2010 and a new record. Revenue from tourism exceeded $2 billion, providing more money for Cubans to use in purchasing imported foods. Canada is the top visitor, Rosson said, with 900,000 going to Cuba in 2011.
“They are more likely to go during the winter months,” he said. “They can fly from Canada directly to the major beach resort of Varadero.”
Those resorts serve many items, including chips, fresh fruit and table cuts of beef and pork.
“The downside is that Cuba is attempting to implement several economic reforms and design a new more market-oriented path for their economy,” Rosson said. “It creates some instability and uncertainty.”
Rosson said Cuba is “very proficient” in producing certain tropical crops such as sugar, tobacco, citrus and vegetables grown in greenhouses, but other crops such as rice, wheat and corn struggle due to high humidity, insects, disease and the high cost of production.
“And, of course, hurricanes are a threat with each season,” he said.
Cuba also lacks consistent agricultural credit, so some crop and livestock production is constrained.
“They rely on joint ventures with Spain and China to finance many agribusiness opportunities,” he said.
Agricultural commodities, such as dry beans for example, are shipped out of Corpus Christi. Corn and wheat grown in the Lone Star State ships out of the port of Houston, Rosson said.
The Cuban government’s buying agency, Empressa Cubana Importada de Alimentos (Alimport), handles all U.S. exports to the island, Rosson said.
“Alimport is Cuba’s exclusive agent for all purchases from the U.S. and negotiates purchases, handles documents and arranges logistics and transportation of goods,” Rosson said.
Before a U.S. firm can take product samples or export its products to Cuba, Rosson said each product must be reviewed and licensed by the Office of Exporter Services, Bureau Industry and Security, U.S. Department of Commerce.
“The license is free and is valid for one year,” Rosson said.