Posted September 07, 2007 by publisher in Cuba Business.
By Ron Smith | Southwest Farm Press Editorial Staff
Liberalized trade with Cuba could double or triple the volume of agricultural exports leaving the Port of Corpus Christi, Texas.
“The Trade Sanctions and Reform Act allows (U.S. interests) to sell agricultural products, medicine and lumber to Cuba,” says Michael Perez, director of port operations and business development for the Port of Corpus Christi.
Perez, during a recent National Cotton Council Producer Information Exchange (P.I.E.) tour, said Cuba currently buys some citrus, beans, and other agricultural products from the United States. They also purchase utility poles.
“We’re not shipping any rice out of here yet,” he said to cotton farmers from California and Arizona and representatives from sponsors NCC and Bayer CropSciences.
A sticking point that limits trade, even under the reform, is a stipulation that demands cash up front for any goods sold to Cuba. “The cash sales requirement hurts trade,” Perez said.
“We always have a trade deficit through this facility. That’s why liberalized trade with Cuba is so important. We bring in a lot of crude oil through this port that’s used domestically.”
He said cotton also could be an important export commodity with more liberalized trade.
And if the United States lifts the trade embargo, U.S. companies could take part in increased oil exploration in Cuba. “We hope we can participate in that,” he said.
“Cuba is also turning to bio-energy sources, such as wind turbines.”
The Port of Corpus Christi already handles a significant amount of wind turbine units, many from Europe en route to wind farms in the Southwest.
Cotton was one of the commodities that put the Port of Corpus Christi on the map, Perez says, but is not a major player today.
“Most cotton is shipped in containers now,” he said, “and we’re not equipped to ship in containers yet.”
He hopes that will change within approximately two years. A container facility in the works “will put us in the container shipping business.”
Currently, local warehouses store cotton, and then ship to Houston where it’s moved out to the Pacific Coast and to the Far East markets. A container facility would shorten the route and improve efficiency, Perez said.
The Port of Corpus Christi handles the sixth highest volume of any port in the United States. The container facility could move it into fifth place. “We’re also the deepest shipping channel in the U.S. Gulf, at 45 feet of water.”
Port authorities have requested funds from the U.S. Congress to deepen the channel to 55 feet to improve shipping efficiency and to accommodate larger vessels.
“We want to be a well-diversified port,” Perez said. “We also have a 100,000 square foot cold storage facility.” He said liquid and dry bulk materials make up most of the goods coming through the facility.
“We have three large railroads serving the port and a highway system that allows trucks to move goods quickly from here to Los Angeles.”
The port operates as a free trade zone. “That was designed to create jobs,” Perez said. “No duty is imposed on goods while they are stored or assembled here.”
He said the free trade status allows shippers to get around quotas or certain fees. “If a company has more material than a quota will allow, it can store part here and move it out later without fees. Some companies use the free trade zone to manipulate duty costs.”
Perez said as the facility expands, with the container facility and a deeper channel, agriculture should benefit. “We hope to see more cotton and grain move through,” he said.
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