(Agrimoney) – US exports of the likes of barley and corn to Cuba could grow “dramatically” if plans outlined by President Barack Obama to “normalise” Washington-Havana relations take root, with wheat trade potentially to grow strongly too.
The US Grains Council, which promotes US exports of the likes of barley, corn and sorghum, said that it planned to “re-engage” Cuba early next year, to take advantage of a “new environment to build markets” for American grains.
“Farm leaders now have reason to be optimistic about an increased presence in Cuba,” the council said, if acknowledging the strong opposition still present within the US to warmer relations with Havana.
However, the potential gains to agriculture of a free-up in trade are large, with the USGC saying that “coarse grains exports could increase dramatically if United States-Cuba diplomatic relations are fully normalised”.
For corn, Cuba, which imports some 900,000 tonnes of the grain a year, could become the 12th largest buyer of US exports if “trade is truly open”, said the council adding that it “strongly supports open trade in, and works in, the Cuban market”.
In recent years, the US has, despite its proximity to Cuba, captured only about 15% of the island’s corn imports, although it does have just about a 100% share of the 150,000 tonnes of distiller’s grains (DDGs), a corn-derived feed ingredient, bought in every year.
‘Largest wheat market in the Caribbean’
The comments follow a statement from US Wheat Associates, which promotes US wheat exports, that it “applauded” President Obama’s moves to build relations with Cuba.
“Cuba, which does not grow wheat commercially, is the largest wheat market in the Caribbean, purchasing almost all of its wheat from the European Union and Canada,” the group said.
Indeed, it has not purchased any US wheat since 2011.
Yet the island “could import at least 500,000 metric tons of wheat from the US each year”.
“If Cuba resumes purchases of US wheat, we believe our market share there could grow from its current level of zero to around 80-90%, as it is in other Caribbean nations,” said Paul Penner, president of America’s National Association of Wheat Growers.
‘Timing is suspicious’
The prospect of warmer US-Cuban relations has also been welcomed by some US agribusiness groups, with Cargill, the ag trading giant, saying that “long been a proponent of ending” the US embargo on trade with the island.
“Our two countries and people deserve the opportunity to trade and engage with one another,” said David MacLennan, the Cargill chief executive.
And there has already been talk of Cuba purchasing US wheat.
“Just after US President Obama’s press conference on Cuba, we ironically heard Cuba bought US wheat,” said Terry Reilly at Futures International.
“Such a sale is possible, but the timing of the rumour is suspicious,” noting the large gap back to the last such deal.
