USSEC is Optimistic as U.S. Announces Normalization of Relations with Cuba
- General News
The announcement last week by President Obama of the normalization of United States relations with Cuba could hold great promise for the U.S. soy industry. Although U.S. ag exports have been allowed to Cuba throughout the embargo under the Trade Sanctions Reform and Export Enhancement Act, restrictions have kept these numbers from reaching their full potential. In the past, Cuban buyers of U.S. ag products have been required to pay in advance through a third party, but these barriers will now be removed, paving the way for more U.S. soy exports to Cuba.
In FY14, USSEC used non-checkoff funds to conduct a market-research project aimed at gathering intelligence to pinpoint potential opportunities. These trade and technical servicing projects could help lay the groundwork for increased soy exports in light of recent developments. Last marketing year, Cuba imported more than 2 million bushels of whole U.S. soybeans and the equivalent of over 6 million bushels of U.S. soybean meal. USSEC hopes to discover new markets for using U.S. soy in food for human consumption, as well as opportunities for using more soybean meal for animal feed.
The nation of Cuba has a population of 11.5 million with a GDP of $68.72 billion (all dollars are U.S.). Cuba has a dual economy, with two distinct systems operating side by side. Its top trade partners are: China (27.5%), Canada (26.9%), Netherlands (11.1%), and Spain (4.7%). Brazil and the EU are growing and could surpass Cuba’s current trade partners. Cuba’s top industries are tourism, energy and mining, cigars and rum. The country’s national debt is estimated at $13 billion. Cuba imports up to 80 percent of food used for rations. Presently, the country has exports worth $2.4 billion and imports of $6.9 billion.
The following table shows Cuba’s imports for soybeans, soymeal and soy oil by origin in the calendar years (CY) 2011- 2013. The data are from Oil World.
The U.S. share of Cuba’s combined imports of the three commodities was 34.8 percent. In the first 10 months of CY 2014, the U.S. exported 106,900 metric tons (MT) of soymeal to Cuba, but no soybeans or soy oil. However, USDA/FAS reports that the U.S. exported 47,900 MT of soybeans and 142,600 MT of soymeal to Cuba in 2013/14.
The December 18 USDA export sales report indicates the U.S. has shipped 8,500 MT of soybeans to Cuba. It also indicated a total of 88,500 MT of U.S. soymeal has been sold to Cuba for 2014/15 shipment, but none has been shipped yet.
Cuba’s Imports of Soybeans, Soymeal and Soy Oil by Origin
CYs 2011- 2013