By JOHN RICE, , Associated Press Writer
HAVANA, Cuba (AP) - Cuba, once one of the world’s largest sugar exporters, is transforming old sugar plantations into farmland at the same time it is negotiating a possible purchase of sugar from the United States.
The Communist Party daily Granma reported Friday that Sugar Minister Ulises Rosales del Toro said that 2.47 million acres of sugar cane land are being turned over to production of food or to forestry.
The report comes at the same time that Cuba’s state import company, Alimport, said it is considering an offer by PS International, an agricultural trading company based in Chapel Hill, N.C., to sell U.S. sugar.
“If U.S. producers want to sell us sugar and the price is right, why can’t we buy it?” Alimport director Pedro Alvarez said this week.
He confirmed Friday that talks were still underway.
Wayne Carrick, an international trader for PS International who was attending the Havana International Trade Fair here, said Friday that negotiations were still going on for the possible sale of 5,000 to 15,000 tons of sugar. He said a deal might be reached within a few weeks.
He indicated that part of the issue may be price: U.S. sugar prices are above the world price at which Cuba normally buys sugar.
Alimport, meanwhile, announced several new deals on Friday to purchase U.S. soybeans, wheat and other goods, as well as contracts with a contract with a U.S. shipper to bring the material to Cuba.
Sugar was long a dominant force in the Cuban economy and an obsession among Cuban officials both before and after the 1959 revolution led by Fidel Castro.
In the 1960s and 1970s, officials sent hundreds of thousands of urban workers into the fields each year to help bring in the harvests.
One of the first punitive measures imposed by the United States after the revolution was to cut the quota of sugar purchased from Cuba, which began trading the product to the Soviet bloc at prices above world market levels.
Production of 6 million to 7 million tons a year was common. An unsuccessful attempt to produce 10 million tons in 1970 was a major national crusade.
But harvests have been declining over the past decade and the collapse of the Soviet Union took away the most lucrative market.
In 2002, Cuba closed 70 mills in a drive for greater efficiency. Harvests slipped to 3.6 million tons in 2002. No figure has been given for this year, but most experts say it was less than 2 million.
Tourism has replaced sugar as Cuba’s main source of foreign income.
Archibald Ritter, a specialist on the Cuban economy at Carleton University in Canada said an artificially imposed exchange rate of 1 Cuban peso per dollar has made the Cuban sugar industry seem less productive than it really is.
The free market rate of the peso is about 26 to the dollar. So when the Cuban government sells sugar abroad but gives the industry only one peso per dollar, “they are always going to be extremely unprofitable.”
“It has been starved of new investment for so long, so it’s not surprising that it appears to be inefficient,” Ritter said.