http://havanajournal.com/business/entry/rice_trade_poses_several_benefits_to_texas_cuba_commerce/

HavanaJournal.com: Cuba Business

Rice trade poses several benefits to Texas - Cuba commerce

Posted June 09, 2004 by publisher in Cuba Business.
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By MONETTE TAYLOR | South Central Texas Edition | [url=http://www.CountryWorldNews.com]http://www.CountryWorldNews.com[/url]

At the recent meeting of the Texas-Cuba Trade Alliance (TCTA) in Houston, producers and agri-business attendees heard Jay Davis of East Bernard Rice Marketing explain how Texas and the United States can benefit by selling rice to Cuba.

Davis said the population of Cuba is over 11 million people. Tourist numbers reached over 2 million in 2001, and projections are 3 million visitors by 2005.

He noted that between 1999 and 2003, Cuba imported between 400,000 and 500,000 metric tons of rice, with Vietnam shipping between 15 and 20 percent of the product. Rice is, also, shipped and purchased from Thailand.

Although these two countries are known for their rice fields, the quality of the rice doesn’t measure up to Texas rice, said Davis. Not only does Texas produce quality rice, but the transit time from Texas to Cuba can be measured in days, not weeks. This would allow for smaller shipments, ideal because of freight costs, explained Davis.

While the better quality rice would benefit Cuban citizens and tourists, there are many benefits for Texas rice producers, too.

According to Davis, the increased sales to Cuba would generate more income for Texas products and help the infrastructure of the rice industry. Also, it would help increase the planted rice acres in Texas.

Davis reminded the audience that rice production has declined the past number of years, due to the market prices and options of marketing the product. He noted there are around 200,000 acres planted in rice, today, and with the reduction from over twice that acreage a number of years ago, Texas has lost many of the duck and geese habitats that drew hunters ... as well as bird-watchers, which results in a loss of dollars for Texas.

Over 100,000 metric tons of rice has been shipped to Cuba so far in 2004, and Davis explained that the possibility of another 100,000 tons from Texas could happen. He said that could mean $4 million in gross revenue for mills; $6 million in gross revenue for freight ports, warehouses, bags, etc.; and, around $31.5 million in gross revenue for producers and production costs.

While rice production in Texas has steadily declined since 1993, production is up in 2004, and expected to continue to rise in 2005, Davis said.

As far as possible trading problems with Cuba, Davis explained there is “no negative ... just challenges.” He explained the politics and tourism dollars in Cuba are making the market very accessible, along with better financing and bulk loading facilities going into Cuba, now.

He realizes the competition ... Vietnam and Thailand ... are not going to give up marketing their rice, but since Texas has so many more advantages and better quality rice, the timing is ripe for Texas producers.

One challenge is the current trade embargo the United States has on Cuba. Davis believes that once the embargo is lifted, it will make a large difference in expanding the market in many areas.

“In trading with Cuba, it will include the lifting of the embargo on Cuba,” Davis said.

There is no set time for the embargo to be lifted, but TCTA and the USA Rice Federation are advocating it.

Although cash sales of U.S. agriculture goods are permitted, two-way trade between the United States and Cuba is prohibited. It is hopeful this will change in the near future and allow for easier marketing.

“Although there is definitely growth there, we are still the ‘new kid on the block,’” said Davis in conclusion.

Member Comments

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On June 09, 2004, publisher wrote:

More states should aggressively pursue business relationships with Cuba.