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HavanaJournal.com: Cuba Business

Imports to Cuba and exports from Cuba decline sharply in 2008

Posted October 20, 2009 by publisher in Cuba Business.
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By Marc Frank | Reuters

Business between Cuba and four of its top five trading partners has declined sharply this year in a reflection of the communist-led Caribbean island’s deep economic crisis, trade reports from the countries said.

Reductions in exports to and imports from Cuba ranged from 20 percent to as high as 50 percent, according to the reports from China, Spain, Canada and the United States. In descending order, they are the top traders with Cuba after Venezuela.

Numbers were not available for Venezuela, which is the leading economic and political ally of Cuba’s government and supplies the island with oil.

China, Cuba’s second trading partner, reported that imports from the island fell 48.2 percent to $368 million through August, while Chinese exports to Cuba dropped 12.7 percent to $641.9 million.

Spain, tied with Canada as the island’s third biggest trading partner, said its exports to Cuba declined 43 percent to $394 million through July, while imports were down 24 percent to $91 million.

Canada, which did $1.4 billion in trade with Cuba last year, said exports plummeted 52.4 percent to $242 million through August and imports fell 55.7 percent to $283 million.

The United States, which is Cuba’s fifth trading partner despite its 47-year-old trade embargo against the island, said sales to Cuba totaled $383.8 million through August, down 23 percent.

Most U.S. exports to Cuba are agricultural products, which are permitted under an exemption to the embargo.

While no information was available from Venezuela, Cuba’s close socialist ally, it is likely the value of its exports to the island—mostly oil—will fall dramatically from 2008’s $5.3 billion due to lower oil prices.

Cuba’s economy has been spiraling downward since last year when three damaging hurricanes raked the country, followed by the onset of the global financial crisis.

The combination of rising prices for its imports and declining value of its key exports also depleted cash reserves to the point that the government froze the local accounts of hundreds of foreign businesses and stopped or slowed payments to many foreign creditors.

Cuba’s government has forecast a decline of $500 million in export revenues this year and slashed imports by 22.5 percent.

The island’s trade deficit soared to $11.4 billion in 2008, up 65 percent, according to the National Statistics Office.

(Editing by Jeff Franks and Diane Craft)

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