October 6, 2000

Foreign Agricultural Service Administrator Tim Galvin says with credit guarantees, market development and food aid, the Cuban market for U.S. agricultural exports could be worth $300 million with "a year or two." With completely normalized trade relations, Cuba could be a $1 billion market for U.S. farm good within five years, he added. House and Senate negotiators gave final approval tonight to a partial relaxation of existing sanctions, though the provision did not go as far as many farm groups had hoped.

The projected growth under fully normal trade relations would make Cuba the second largest market in Latin America, after Mexico. "However, this potential cannot be reached without substantial investments in Cuba's economy and a strengthening of its trade balance," Galvin told the U.S. International Trade Commission. The U.S. commodities with the most market potential are wheat, feed grains, rice, beans, vegetable oil, and meat and dairy products, "although other products may benefit as well," he added.

The United States is in a position to supply most of Cuba's grain demand if trade is normalized. Cuba imports more than $320 million in grains, grain products and pulses a year, making up almost half of its annual agricultural imports. Canada has dominated the wheat and flour market until that late 1980s, and now, the European Union supplies 90% of the wheat market through export credits, Galvin said.

However, U.S. officials believe Cuba would import up to 500,000 tons a year in U.S. feed grains if trade restrictions were lifted.

Lack of domestic oilseed supplies and a significant livestock sector make Cuba "a small but consistent market for protein meal," he added. Most of Cuba's protein meal imports come from Argentina. But using its export programs, the United States "could supply as much as half of Cuba's vegetable oil and soybean meal imports."

The immediate potential for U.S. beef and pork exports would be to hotels and restaurants to supply Cuba's developing tourist industry. With increased economic growth, Galvin estimated the three-to- five year potential for all U.S. dairy exports to Cuba would reach $50-60 million annually.