U.S. food sales to Cuba in steep decline

U.S. food sales to Cuba in steep decline
Tue Jul 27, 2010 2:15pm EDT

HAVANA July 27 (Reuters) - U.S. food sales to Cuba fell by 35 percent
from January through May compared with the same period in 2009, as the
cash-strapped nation cut imports and bought from countries offering
credit, a U.S.-based trade group said on Tuesday.

The steep decline followed a 24-percent drop in sales to the island in
2009 after record sales of $710 million in 2008.

Cuba imports about 60 percent of its food, and the United States has
been the Communist-led island's main provider for years despite
political tensions and the almost five-decades-old U.S. trade embargo.

The Caribbean nation is required to purchase agricultural goods with
cash under a 2000 exemption to the embargo, but Havana is cash-strapped
due to the impact of three hurricanes in 2008, the global financial
crisis, lower tourism revenues and declining earnings for nickel and
other exports.

U.S. food exports to Cuba through May were $182.3 million compared with
$278.2 million during the same period last year, according to figures
released by the U.S.-Cuba Trade and Economic Council, a New York-based
group monitoring trade between the two countries.

The report said Cuba was turning more to countries such as Brazil,
France, Canada, Russia and China where it could purchase food on credit,
and to state-run companies from private ones in many countries.

Legislation under consideration in the U.S. Congress would lift
restrictions on Americans traveling to Cuba and some regulations on the
food sales.

A broad coalition of farm, business and human rights groups have backed
the bipartisan bill as an important step toward ending the U.S. embargo
and promoting trade and change on the island.

Cuban officials have encouraged visiting U.S. trade delegations to work
to abolish the travel ban and lift food sale regulations, arguing that
boosting American tourism to the island would give Havana more money to
buy U.S. goods.

But John Kavulich, who heads up the U.S.-Cuba Trade and Economic
Council, said he doubted improved regulations would increase sales due
to Cuba's chronic economic problems.

"Changes to the existing laws and regulations governing United States
agricultural products and food products will not result in meaningful
increases in exports," he said, while not commenting on the travel ban.

U.S. exports to Cuba include corn, wheat, chicken, soybeans and powdered
milk.

http://www.reuters.com/article/idUSN2724344120100727