Transcript US Agricultural Export Prospects for Cuba Parr Rosson, Director

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
$/Person
$400
Million Persons
Population
Capita GDP
$325

$320

$350
Per
$290

$280

$350

11.36
11.40
11.35
11.33
$300
11.30
11.30
$250
11.26
$200
$150
11.25
11.23
11.20
$100
$50
11.15
$0
USDA, FAS.
2001
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
Million Dollars
$450.0
$397.9
$358.7
$400.0
$335.5
$341.3
$350.0
$254.3
$300.0
$250.0
$200.0
$141.2
$150.0
$100.0
$50.0
$6.0
$0.0
2001
2002
2003
2004
Source: U.S. Trade Internet System, www.fas.usda.gov/ustrade
2005
2006
U.S. Monthly Exports of Agricultural
and Related Products to Cuba
$70.0
Total: $1.55 Billion
(Dec 01 - Feb 07)
$60.0
Million U.S. Dollars
$60.7


2006
$55.4
$50.0
$43.2

$41.1

$37.9
$40.0
$35.7

$33.8
$33.6 $32.7


 
$30.0
$30.0
$24.3 $23.6
$22.4
$21.4
 
$20.8 $20.4

$18.9

$17.9
$17.5
 $17.4
$20.0

$15.8

$12.9
$13.7  $15.0
$12.8
$12.5

$10.7

$9.9


$8.1 
$7.9 $7.5

$10.0 
$4.6
$5.9  $4.0 


$35.7
$35.1
$34.9
$33.4 
$33.2 $32.6
$31.7

$31.5
$31.0 

$29.4

$29.0
$28.7 

$28.3
$28.1



 $24.0 $24.3
$23.7
$24.6 
$24.5 
$22.7
$21.8
$21.7

$21.2  $19.9



$19.5 


$18.0
$17.9 


$15.1


$8.3


$0.0
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
Source: U.S. Trade Internet System, www.fas.usda.gov/ustrade
U.S. Ag and Related Exports to Cuba, 2005 & 2006
Million U.S. Dollars
$70.0
$60.0
2006 Total: $335.5 Million
$55.0
2005
$51.4
$44.9
$50.0
$42.6
2006
$39.5
$40.0
$31.7
$30.0
$19.9
$14.1
$20.0
$12.6
$7.3
$10.0
$0.0
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S ource: Foreign Agricultural S ervice, US DA
Composition of U.S. Agricultural and
Forestry Exports to Cuba, 2005 & 2006
2005Total: $358.7 Million
2006 Total: $335.5 Million
Bulk
53.8%
Bulk
53.1%
Intermediate
16.6%
Forestry
1.5%
Forestry
2.2%
Consumer
28.8%
Consumer
22.5%
Intermediate
21.5%
Source: U.S. Trade Internet System, www.fas.usda.gov/ustrade
Cuban Share of Caribbean Grain Imports
6
Cuban Wheat/Rice/Corn Imports
Other Caribbean
Million Metric Tons
5
4.8
5.1
4.5
5
4.1
4.1
2000-2001
2002-2003
4
3
2
1
0
2001-2002
2004-2005
2003-2004
2005-2006
Cuba's Grain Shortfall
2.5
2.3
2.2
0.5
0.39
0.381.7
0.4
1.5
MMT, Production
0.32
0.27
0.3
0.21
1
0.2
0.5
0.1
0
0
2000-2001
2001-2002
2002-2003
Total Wheat/Rice/Corn Consumption
2003-2004 2004-2005**
Total Wheat/Rice/Corn Production
MMT, Consumption
1.8
2
1.9
Exports of Selected Agricultural Products to
Cuba, Selected Countries
Million Dollars
$350.0
$300.0
U.S.
Argentina
Vietnam
Canada
Brazil
China
EU-27
2001
2002
2003
$250.0
$200.0
$150.0
$100.0
$50.0
$0.0
1999
2000
2004
2005
2006
Source: Respective Governement Sources and FAO -STAT;etnam
Vi 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
U.S.
EU-27
Canada
Argentina
$80.0
$60.0
$40.0
$20.0
$0.0
1999
2000
2001
Source: Re spe ctive Gove rne ment Source s
2002
2003
2004
2005
2006
Exports of Corn to Cuba, Selected Countries
Million Dollars
$60.0
U.S.
Argentina
Others
$50.0
$40.0
$30.0
$20.0
$10.0
$0.0
1999
2000
2001
Source : Re spective Governe me nt Source s
2002
2003
2004
2005
2006
Exports of Rice to Cuba, Selected Countries
Million Dollars
$120.0
Vietnam
U.S.
China
Others
$100.0
$80.0
$60.0
$40.0
$20.0
$0.0
1999
2000
2001
2002
2003
2004
2005
2006
Source: Re spe ctive Gove rne ment Source s and FAO -STAT;
Vie tnam value s e stimate for 2005 & 2006 from volumes, Vie tname se price s, and e xchange rate s
Exports of Poultry Meat to Cuba
Selected Countries
Million Dollars
$70.0
U.S.
Brazil
EU-27
Canada
$60.0
$50.0
$40.0
$30.0
$20.0
$10.0
$0.0
1999
2000
2001
2002
Source: Re spe ctive Gove rne ment Source s
2003
2004
2005
2006
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
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