U.S. Agricultural Export Prospects for Cuba Parr Rosson, Director Center for North American Studies Department of Agricultural Economics Texas A&M University System
Background Prior to Embargo, U.S. Owners Held 25% of All Arable Land in Cuba (2/7/1962) Sugar, Citrus, Vegetables, Cattle Trade Sanctions Reform & Export Enhancement Act, 2000, Allows US Exports Top 25 Market for US Agriculture & Forestry Govt Agency, Alimport, Buys All Food Top Cuban Exports: Sugar, Nickel, Tobacco, Fish, Citrus Top Cuban Imports: Petroleum, Food, Machinery, Chemicals
Market Prospects 2004-2006 Strong Economic Growth (5.4%- 7.5%) Spurred by Tourism, Higher Sugar, Citrus & Nickel Prices Cuba is Far From Self-Sufficient in Food, But Lacks Strong, Consistent Purchasing Power Debt Overhang: $15.4 Billion, 40% of GDP 2005 Cuban Food Imports Reached $750 Million $336 Million from United States, 42% Market Share Politics Dominate
North Cuba Basin Oil & Gas Reserves 4.6-9.3 BBL Oil 9.8-21.8 TCF Gas (USGS ) 2 Operational Refineries with 100,000 b/d capacity (Cuba Transition Project)
Cuba: Population & Income Growth $400 $350 $300 $250 $200 $150 $100 $50 $/Person Population $320 11.23 $290 11.26 Per Capita GDP $280 11.30 $325 11.33 Million Persons $350 11.36 11.40 11.35 11.30 11.25 11.20 11.15 $0 2001 USDA, FAS. 2002 2003 2004 2005
Tourism in Cuba Cuba Number Two Caribbean Tourist Destination-Creates Food Demand Economic Contribution is 12% of GDP About 1 Million U.S. Tourists Projected If Travel Restrictions Are Lifted Additional U.S. Food Exports of $200 Million Annually Required to Support U.S. Tourism when/if Travel Restrictions Lifted
U.S. Agricultural and Related Products Exports to Cuba, 2001-2006 $450.0 $400.0 $350.0 $300.0 Million Dollars $397.9 $358.7 $254.3 $335.5 $341.3 $250.0 $200.0 $150.0 $141.2 $100.0 $50.0 $6.0 $0.0 2001 2002 2003 2004 2005 2006 Source: U.S. Trade Internet System, www.fas.usda.gov/ustrade
Jan '07 Oct Jul Apr Jan '06 Oct Jul Apr Jan '05 Oct Jul Apr Jan '04 Oct Jul Apr Jan '03 Oct Jul Apr Jan '02 Dec '01 $70.0 $60.0 $50.0 $40.0 $30.0 $20.0 $10.0 $0.0 U.S. Monthly Exports of Agricultural and Related Products to Cuba $60.7 $55.4 2006 $43.2 $41.1 $37.9 $35.7 $33.8 $35.1 $33.6 $34.9 $35.7 $32.7 $33.2 $32.6 $33.4 $30.0 $31.0 $31.5$31.7 $28.1 $29.4 $28.7 $29.0 $28.3 $24.3 $20.8 $20.4 $21.4 $22.4 $23.6 $24.6 $24.5 $24.0 $24.3 $23.7 $21.2 $21.8 $21.7 $22.7 $17.5 $17.9 $18.9 $19.5 $19.9 $17.4 $17.9 $18.0 $15.8 $13.7 $15.0 $15.1 $12.8 $12.9 $12.5 $9.9 $10.7 $7.9 $7.5 $8.1 $8.3 $4.6 $5.9 $4.0 Total: $1.55 Billion (Dec 01 - Feb 07) Million U.S. Dollars Source: U.S. Trade Internet System, www.fas.usda.gov/ustrade
U.S. Ag and Related Exports to Cuba, 2005 & 2006 $70.0 $60.0 Million U.S. Dollars $55.0 $51.4 2006 Total: $335.5 Million 2005 2006 $50.0 $44.9 $42.6 $39.5 $40.0 $31.7 $30.0 $20.0 $19.9 $14.1 $12.6 $7.3 $10.0 $0.0 SB Prod. Wheat Poultry Corn Rice Soybeans Dry Beans Pork Milk Conc. Wood Prod. Source: Foreign Agricultural Service, USDA
Composition of U.S. Agricultural and Forestry Exports to Cuba, 2005 & 2006 2005Total: $358.7 Million 2006 Total: $335.5 Million Bulk 53.1% Bulk 53.8% Forestry 1.5% Forestry 2.2% Intermediate 16.6% Consumer 28.8% Intermediate 21.5% Consumer 22.5% Source: U.S. Trade Internet System, www.fas.usda.gov/ustrade
Cuban Share of Caribbean Grain Imports 6 5 Cuban W heat/rice/corn Imports Million Metric Tons O ther C aribbean 5 5.1 4.8 4.5 4.1 4.1 4 3 2 1 0 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006
MMT, Consumption Cuba's Grain Shortfall MMT, Production 0.5 0.4 0.3 0.2 1.8 0.32 2.2 0.39 0.381.7 1.9 0.27 0.21 2.3 2.5 2 1.5 1 0.5 0.1 0 0 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005** Total W heat/rice/c orn ConsumptionTotal W heat/rice/c orn Production
Exports of Selected Agricultural Products to Cuba, Selected Countries Million Dollars $350.0 $300.0 U.S. Vie tn am Braz il EU-27 Argentina Canada China $250.0 $200.0 $150.0 $100.0 $50.0 $0.0 1999 2000 2001 2002 2003 2004 2005 2006 Source: Respective Governement Sources and FAO-STAT; Vi etnam and China values representr rice only; Vietnam data are estimated for 2005 & 2006 from volumes, Vietnamese prices, and exchange rates
Exports of Wheat to Cuba, Selected Countries Million Dollars $100.0 $80.0 U.S. EU-27 Canada Arge ntin a $60.0 $40.0 $20.0 $0.0 1999 2000 2001 2002 2003 2004 2005 2006 Source: Respective Governement Sources
Exports of Corn to Cuba, Selected Countries Million Dollars $60.0 U.S. Argentina O thers $50.0 $40.0 $30.0 $20.0 $10.0 $0.0 1999 2000 2001 2002 2003 2004 2005 2006 Source: Respective Governement Sources
Exports of Rice to Cuba, Selected Countries Million Dollars $120.0 Vietnam U.S. China O thers $100.0 $80.0 $60.0 $40.0 $20.0 $0.0 1999 2000 2001 2002 2003 2004 2005 2006 Source: Respective Governement Sources and FAO-STAT; Vietnam values estimate for 2005 & 2006 from volumes, Vietnamese prices, and exchange rates
Exports of Poultry Meat to Cuba Selected Countries Million Dollars $70.0 U.S. Braz il EU-27 C an ada $60.0 $50.0 $40.0 $30.0 $20.0 $10.0 $0.0 1999 2000 2001 2002 2003 2004 2005 2006 Source: Respective Governement Sources
Summary U.S. Market Position Strong, but Future Prospects Clouded by High Prices & Competition Tourism Key to Market Growth in Near Term, Along with Sugar, & Nickel Exports Cuba the Top Carib Grain Market Latent Demand for Meats, Especially Pork & Beef, Most Consumer Products Currently for Tourists Optimism About Recent Oil/Gas Discovery
Thanks! International Trade and Market Analysis 979-845-3070 prosson@tamu.edu