Cuba Business

Cuba a Promising Market for U.S. Dairy Exports

Posted May 04, 2004 by publisher in Cuba Business.

FRESNO, Calif., May 3 /PRNewswire/—Despite a U.S. trade embargo with Cuba that restricts business dealings, DairyAmerica Inc. has finalized two sales of skim milk powder to the Caribbean island. These transactions, for 4,000 metric tons (8.8 million lbs.), are among the first sizeable sales of U.S. dairy products to Cuba in more than 40 years.
Since October 2000, the U.S. government has permitted limited sales of food to Cuba under certain conditions. Exporters who want to serve the market must go through a complex procedure to get a special license and product can’t be delivered on a U.S.-flag ship. Most importantly, sales are for cash-in- advance only. Notwithstanding these obstacles, U.S. food sales to Cuba were approximately $325 million last year.

“Cuba is a natural trading partner for us, and cannot continue to be ignored because of U.S. policies,” said Rich Lewis, chief operating office of DairyAmerica. “It’s only 90 miles off the Florida coast, with a population of 11 million people. The island attracts 2 million tourists per year—a figure that could be considerably higher if U.S. citizens were allowed to travel there. Alimport, the nation’s food import agency, is looking to buy more from the United States. Agency officials say Alimport could import 40,000-50,000 metric tons (88-110 million lbs.) of U.S. milk powder annually if all restrictions were removed.”

The U.S. Dairy Export Council (USDEC), an association of U.S. processors, farmers and traders, also recognizes the potential of the Cuban market.

“USDEC and the U.S. dairy industry have long supported the effort to normalize trade and travel with Cuba through legislative activity and in periodic Congressional testimony,” said Tom Suber, USDEC’s president. “To explore the market potential, the dairy industry conducted a study mission to Cuba three years ago, opening a dialogue with the local trade. Since then USDEC has sought to assist companies to increase business within the current restrictive confines of U.S. law.”

The travel ban to Cuba imposed on U.S. citizens limits the real possibilities for U.S. purchases, said Pedro Alvarez, general manager of Alimport.

“It is widely known that tourists want products they can obtain in their own countries, which means we would have to import a sizeable amount of goods for U.S. tourists (if travel restrictions were lifted),” he said. In addition, tourism is one of Cuba’s principal sources of income. Opening the border to tourists and investment would be a boon to the Cuban economy, giving consumers more money to buy U.S. food, Alvarez explained.

Source: DairyAmerica, Inc.

Member Comments

On May 04, 2004, publisher wrote:

The pressure is on the Embargo and the Embargo is a house of cards.