The Cuban government can’t get enough of American farm products. This week 400 U.S. farmers and food traders arrived in Havana to peddle their wares.
During a three-day bidding war, Cuban purchasing agents were jumping from one negotiating table to the next set up in Havana’s Convention Center, bickering over prices wheat, corn, rice and cattle.
The competition is stiff with 172 companies from 30 states, in addition to Washington D.C. and Puerto Rico, in the running. But the prize is worth it: cash deals worth $100 million, on top of $120 million in contracts already signed this year.
According to Pedro Alvarez, CEO of Alimport, the island’s sole food importer, just about everyone leaves a winner with a contract in hand. “We’re receptive to anyone who comes to us in good faith.”
Substantial U.S.-Cuban commerce
Cuba made its first U.S. food purchase in December 2001 after Washington eased its trade embargo to allow agricultural sales for cash.
The figures differ on how much trade has transpired since then.
According to Alvarez, his company has paid out over $560 million and another $80 million in shipping and insurance costs.
The U.S.-Cuba Trade and Economic Council, a New York-based not-for-profit organization, puts total food sales at $430 million.
Either way, the commerce is substantial.
"Trade offers us hope and opportunity," Idaho Republican Rep. C.L. "Butch" Otter told the press after the first round of negotiations.
Earlier this month, his state sold Cuba $10 million worth of potatoes and peas, while the state of California signed a $10 million food deal this week as well.
The agricultural giant, Archer Daniels Midland Company, one of the pioneer companies to cut through the miles of U.S. red tape in order to sell to the communist island, won another contract for $8.9 million worth of corn. The Cubans also bought $3 million worth of Arkansas rice from Riceland Foods.
Also eager to grab a piece of the Cuban pie – food executives from the Sunshine Sate of Florida, home to one million Cuban exiles.
John Parke Wright IV, a Naples rancher whose family owned a cattle business in Cuba before 1959, hopes to add a few hundred more cattle head to an on-going order he penned with Alimport.
Selling mojiito and daiquiri mixes to Cuba
Meanwhile, Richard Walzer, president of Fort Lauderdale’s Splash Tropical Drinks, is trying to branch out into soda.
His multi-million dollar company has already sold half a million dollars worth of mojito and daiquiri mixes to Cuba and has brokered a deal to become an honorary member of Cuba’s Chamber of Commerce.
Brushing off South Florida concerns that American business helps to prop up the Castro regime, Walzer told NBC News, “This is great for American business. Anyone who complains is trying to hurt our economy and our export deficit.”
Currently, the U.S. ranks as Cuba's seventh-largest trading partner while the island holds 35th place for the United States.
One improvement in U.S.-Cuban relations
At the same time, Cuban officials view bilateral relations with Washington at an all-time low. Not warm to begin with, relations froze last spring after the Castro government first accused the Bush administration of providing unprecedented support to the internal dissident movement and then jailed 75 dissidents on sedition charges.
In December, the State Department cancelled immigration talks with the Cuban Foreign Ministry, the only on-going communication between the two governments.
Just prior to that, the White House decided to pump up enforcement of the trade embargo by denying a broad range of travel licenses to the island, including one to organize a U.S. food show.
But that failed to stunt the growth of the anti-embargo lobby among U.S. companies. In fact, it is a natural outgrowth of doing business with the Cubans.
It’s no wonder. Alvarez paints a lucrative post-embargo world.
“No embargo would put at my disposal almost $1 billion to spend in the United States,” Alvarez said, referring to his total food imports for the year. He envisions two-way trade, a million American tourists a year, and U.S. investors flocking to the island.
Under the current trade restrictions, Alimport pays cash and is prohibited from seeking U.S. financing. Payments, generally made through European banks, have cost the Cuban company an additional $10 million in bank fees and fluctuating foreign exchange rates.
But James Cason, the highest-ranking U.S. diplomat on the island, warned against changing the current arrangement.
“American agricultural producers are getting the best deal possible with Cuba right now. Many non-U.S. companies that extended credit to Cuba have not been paid. Cuba is one of the world's worst credit risks; it is, in fact, the world's largest per capita debtor country.”