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U.S. Agricultural Export Prospects for Cuba Parr Rosson, Director Center for North American Studies Department of Agricultural Economics Texas A&M University System Background Prior to Embargo, U.S. Owners Held 25% of All Arable Land in Cuba (2/7/1962) – Sugar, Citrus, Vegetables, Cattle Trade Sanctions Reform & Export Enhancement Act, 2000, Allows US Exports Top 25 Market for US Agriculture & Forestry Govt Agency, Alimport, Buys All Food Top Cuban Exports: Sugar, Nickel, Tobacco, Fish, Citrus Top Cuban Imports: Petroleum, Food, Machinery, Chemicals Market Prospects 2004-2006 Strong Economic Growth (5.4%- 7.5%) – Spurred by Tourism, Higher Sugar, Citrus & Nickel Prices Cuba is Far From Self-Sufficient in Food, But Lacks Strong, Consistent Purchasing Power Debt Overhang: $15.4 Billion, 40% of GDP 2005 Cuban Food Imports Reached $750 Million $336 Million from United States, 42% Market Share Politics Dominate North Cuba Basin Oil & Gas Reserves 4.6-9.3 BBL Oil 9.8-21.8 TCF Gas (USGS ) 2 Operational Refineries with 100,000 b/d capacity (Cuba Transition Project) Cuba: Population & Income Growth $/Person $400 Million Persons Population Capita GDP $325 $320 $350 Per $290 $280 $350 11.36 11.40 11.35 11.33 $300 11.30 11.30 $250 11.26 $200 $150 11.25 11.23 11.20 $100 $50 11.15 $0 USDA, FAS. 2001 2002 2003 2004 2005 Tourism in Cuba Cuba Number Two Caribbean Tourist Destination-Creates Food Demand – Economic Contribution is 12% of GDP About 1 Million U.S. Tourists Projected If Travel Restrictions Are Lifted Additional U.S. Food Exports of $200 Million Annually Required to Support U.S. Tourism when/if Travel Restrictions Lifted U.S. Agricultural and Related Products Exports to Cuba, 2001 - 2006 Million Dollars $450.0 $397.9 $358.7 $400.0 $335.5 $341.3 $350.0 $254.3 $300.0 $250.0 $200.0 $141.2 $150.0 $100.0 $50.0 $6.0 $0.0 2001 2002 2003 2004 Source: U.S. Trade Internet System, www.fas.usda.gov/ustrade 2005 2006 U.S. Monthly Exports of Agricultural and Related Products to Cuba $70.0 Total: $1.55 Billion (Dec 01 - Feb 07) $60.0 Million U.S. Dollars $60.7 2006 $55.4 $50.0 $43.2 $41.1 $37.9 $40.0 $35.7 $33.8 $33.6 $32.7 $30.0 $30.0 $24.3 $23.6 $22.4 $21.4 $20.8 $20.4 $18.9 $17.9 $17.5 $17.4 $20.0 $15.8 $12.9 $13.7 $15.0 $12.8 $12.5 $10.7 $9.9 $8.1 $7.9 $7.5 $10.0 $4.6 $5.9 $4.0 $35.7 $35.1 $34.9 $33.4 $33.2 $32.6 $31.7 $31.5 $31.0 $29.4 $29.0 $28.7 $28.3 $28.1 $24.0 $24.3 $23.7 $24.6 $24.5 $22.7 $21.8 $21.7 $21.2 $19.9 $19.5 $18.0 $17.9 $15.1 $8.3 $0.0 Jan '07 Oct Jul Apr Jan '06 Oct Jul Apr Jan '05 Oct Jul Apr Jan '04 Oct Jul Apr Jan '03 Oct Jul Apr Jan '02 Dec '01 Source : U.S. Trade Interne t Syste m, www.fas.usda.gov/ustrade U.S. Ag and Related Exports to Cuba, 2005 & 2006 Million U.S. Dollars $70.0 $60.0 2006 Total: $335.5 Million $55.0 2005 $51.4 $44.9 $50.0 $42.6 2006 $39.5 $40.0 $31.7 $30.0 $19.9 $14.1 $20.0 $12.6 $7.3 $10.0 $0.0 od Pr c. on C d oo W ilk M s an Be k r Po ry D s n ea yb So e ic R n or C y tr ul Po . od Pr at he W SB . S ource: Foreign Agricultural S ervice, US DA Composition of U.S. Agricultural and Forestry Exports to Cuba, 2005 & 2006 2005Total: $358.7 Million 2006 Total: $335.5 Million Bulk 53.8% Bulk 53.1% Intermediate 16.6% Forestry 1.5% Forestry 2.2% Consumer 28.8% Consumer 22.5% Intermediate 21.5% Source: U.S. Trade Internet System, www.fas.usda.gov/ustrade Cuban Share of Caribbean Grain Imports 6 Cuban Wheat/Rice/Corn Imports Other Caribbean Million Metric Tons 5 4.8 5.1 4.5 5 4.1 4.1 2000-2001 2002-2003 4 3 2 1 0 2001-2002 2004-2005 2003-2004 2005-2006 Cuba's Grain Shortfall 2.5 2.3 2.2 0.5 0.39 0.381.7 MMT, Production 0.4 1.5 0.32 0.27 0.3 0.21 1 0.2 0.5 0.1 0 0 2000-2001 2001-2002 2002-2003 Total Wheat/Rice/Corn Consumption 2003-2004 2004-2005** Total Wheat/Rice/Corn Production MMT, Consumption 1.8 2 1.9 Exports of Selected Agricultural Products to Cuba, Selected Countries Million Dollars $350.0 $300.0 U.S. Argentina Vietnam Canada Brazil China EU-27 2001 2002 2003 $250.0 $200.0 $150.0 $100.0 $50.0 $0.0 1999 2000 2004 2005 2006 Source : Re spe ctive Gove rne me nt Source s and FAO -STAT;e tnam Vi and China value s re pre se ntr rice only; Vie tnam data are e stimate d for 2005 & 2006 from volume s, Vie tnamese price s, and e xchange rate s Exports of Wheat to Cuba, Selected Countries Million Dollars $100.0 U.S. EU-27 Canada Argentina $80.0 $60.0 $40.0 $20.0 $0.0 1999 2000 2001 Source: Respective Governement Sources 2002 2003 2004 2005 2006 Exports of Corn to Cuba, Selected Countries Million Dollars $60.0 U.S. Argentina Others $50.0 $40.0 $30.0 $20.0 $10.0 $0.0 1999 2000 2001 Source : Respe ctive Gove rne me nt Source s 2002 2003 2004 2005 2006 Exports of Rice to Cuba, Selected Countries Million Dollars $120.0 Vietnam U.S. China Others $100.0 $80.0 $60.0 $40.0 $20.0 $0.0 1999 2000 2001 2002 2003 2004 2005 2006 Source: Respective Governement Sources and FAO -STAT; Vietnam values estimate for 2005 & 2006 from volumes, Vietnamese prices, and exchange rates Exports of Poultry Meat to Cuba Selected Countries Million Dollars $70.0 U.S. Brazil EU-27 Canada $60.0 $50.0 $40.0 $30.0 $20.0 $10.0 $0.0 1999 2000 2001 2002 Source: Respective Governement Sources 2003 2004 2005 2006 Summary U.S. Market Position Strong, but Future Prospects Clouded by High Prices & Competition Tourism Key to Market Growth in Near Term, Along with Sugar, & Nickel Exports Cuba the Top Carib Grain Market Latent Demand for Meats, Especially Pork & Beef, Most Consumer Products Currently for Tourists Optimism About Recent Oil/Gas Discovery Thanks! 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