Hot Topics: Cuban Embargo Will Hurt Grain Trade Despite Continued Engagement
Recent moves to again harden the U.S. trade embargo against Cuba will block near-term sales of U.S. feed grains as well as stymie long-term market development. Despite these factors, the U.S. Grains Council (USGC) plans to continue its long-time work in Cuba, driven by members’ core belief that trade is critical for improving U.S.-Cuba relations and the welfare of the Cuban people.
Historically, Cuba is a 900,000 metric ton (35.4 million bushels) market for corn. Based on recent export sales, capturing this demand would make Cuba the 11th largest customer for U.S. corn. In addition, free flow of grain to Cuba would help capture sales to the Dominican Republic and even Puerto Rico, worth hundreds of millions of dollars per year.
Instead of a predominant U.S. market share, Argentina and Brazil provide the needed financing to the island nation, allowing these competitors to dominate this nearby market despite added transit time, higher freights and additional pest control costs.
Even in the face of these challenges, though, U.S. corn is sold to Cuba. So far this marketing year, Cuba has purchased about 30 percent of its total corn demand from the United States, totaling more than 280,301 tons (11.03 million bushels).
“Corn sales to Cuba this year show that Cubans want our product when its competitive to other origins and that we have significant room for growth given the right policy environment,” said Tom Sleight, USGC President and CEO, in a June statement on changes to Cuba policy. “In the past two years, our work in Cuba and with Cuban grain buyers has shown us that the only hindrance to progress there is U.S. policy.”
The brief opening of U.S.-Cuba relations prompted new Council programs, including several market assessments and hosting an Alimport officials’ team to the United States last year. With changes again making this work more challenging, USGC staff headquartered in Washington, D.C., and Panama continue work to serve participants in the Cuban market and seek openings for programming that will lead to sales.
Learn more about USGC’s work in Cuba here.