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US Food Cos. Hope for Sales to Cuba

April 3, 2002

HAVANA (AP) _ After contracting to sell more than $73 million worth of American food to Cuba, U.S. agricultural firms are hopeful they can increase their sales there despite last week’s rejection of U.S. visas for Cuban officials interested in negotiating new deals.

The United States last week rejected visas for at least three officials representing Cuba’s food import agency. It said the Bush administration didn’t see any reason for them to visit.

Otto Reich, the Cuban-born assistant secretary of state for Western Hemisphere affairs, promised in mid-March that the Bush administration would resist congressional pressure for closer ties with the island.

``We are not going to help Fidel Castro stay in power by opening up our markets to Cuba,″ Reich said at the time.

American farm groups said the officials included technicians who wanted to inspect U.S. poultry plants and discuss sanitary issues.

A new round of sales, for an additional $25 million, could be postponed and some deals could be canceled because of the refusal, said John Kavulich, president of the U.S.-Cuba Trade and Economic Council.

``Any time there is a disruption that isn’t planned, it’s harmful. The question now is: how harmful?″ he said.

Still, American companies are moving discreetly to resolve the problem with the U.S. government, Kavulich said.

``The idea is to solve the problem and not create an issue,″ he said.

The new round of sales _ if successfully negotiated _ is expected to include turkey and pork products and a variety of grains.

Already, the $73 million in food that American firms have contracted to sell Fidel Castro’s government is double what was anticipated.

Nearly six months since Hurricane Michelle howled across the island, ripping apart chicken farms, shaking fruit off citrus trees and yanking up root vegetables, Cuba has purchased, contracted or confirmed its intention to buy about 450,000 metric tons of U.S. agricultural products, the New York-based council said in its regular newsletter this week.

The food, coming from 25 states, includes corn, rice, wheat, soy, poultry, vegetable oil, apples, peas, eggs and pork lard. Deliveries are scheduled through the end of June.

The council’s latest estimate of $73 million for total American food sales to Cuba after the hurricane is up by $5 million from earlier estimates.

``The latest estimate reflects changes either in existing contracts or final confirmations of earlier sales,″ said Kavulich.

The most recent contract to sell food to Cuba is Radlo Foods of Watertown, Mass., for 10 million eggs worth about $500,000.

Cuba traditionally has produced most of its own eggs _ about 1.5 billion annually _ but production fell by 12 percent last year, reportedly because chicken feed was scarce.

A U.S. law that went into effect in 2000 made it possible for American producers to sell food directly to the island, but banned U.S. public or private financing for the sales. Cuba resents the financing restrictions and refused for nearly a year to buy American food _ until the hurricane struck.

Shortly after Michelle hit in early November, Cuba said it would buy American food just once to replenish its reserves. About $40 million in sales were originally envisioned under a one-time round of contracts.

But American food companies have kept pushing to sell, and members of Congress have kept pushing _ so far unsuccessfully _ for legislation to allow U.S. financing for those sales. Currently, American food sales to Cuba must be conducted on a cash basis.

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