UPDATE 1-US food exporters sign Cuba deals for $118 mln
(Adds Cuban minister comments)
HAVANA, May 30 (Reuters) - American food exporters signed contracts worth $118 million on Wednesday to supply Cuba with corn, soybean meal, chicken and other agricultural products.
U.S. sales to Cuba are allowed on a cash-only basis under an exception to the 45-year-old embargo against the country's communist government. Despite the continued hostility between Washington and Havana, U.S. exports to Cuba have totaled $1.55 billion since 2001.
But sales have flattened due to the lack of direct banking between the two nations and a Bush administration requirement that Cuba pay before shipments leave U.S. ports.
Cuban Trade Minister Raul De La Nuez said the food trade with Cuba would not expand beyond current a plateau of about $350 million a year if U.S. restrictions were not eliminated.
"Cuba has shown a will to maintain trade at current levels, but it is hard to see it growing while these restrictions are maintained," De La Nuez told reporters.
Pedro Alvarez, the head of the Cuban food import agency Alimport, said the restrictions force Cuba to use letters of credit from banks in Canada and France to finance imports from the United States, while ships have to specially licensed, adding $110 million to Cuba's financial and transport costs.
U.S. agribusiness executives and farm leaders attending the three-day round of negotiations deplored the U.S. restrictions that have put the brakes on a potentially important market.
The negotiations in Havana come amid growing U.S. congressional scrutiny of the trade embargo imposed in 1962 when Cuban leader Fidel Castro turned Cuba into a Soviet ally.
"We want to do more trade with the Cuban people. We don't think there is anything political about trade for food," said Georgia Agriculture Commissioner Thomas Irvin.
He said it was time to ease trade sanctions on Cuba.
"At least we want to see it loosened up. It has just been too tight. It doesn't make sense that we cannot get a clearance through an American bank when we sell here," Irvin said. "It is ridiculous what we are confronted with in order to do some honest trade with people who want to do business."
Food exporters said Cuba has established a routine for payment through third country banks and they have been on time for the last year. But trade would grow rapidly if all barriers were removed and a travel ban lifted, they said.
Bunge Ltd signed a contract for 30,000 tonnes of soy bean meal and Louis Dreyfus Commodities, based in Kansas City, signed a deal for 25,000 tonnes of yellow corn.
"It is a small piece of our overall export sales from the U.S., but a very strategic and important alliance. We have a large portfolio of commodities so the potential down the road is tremendous for us," said David Weidmaier of Louis Dreyfus, which sell half a million tonnes of food to Cuba per year.
Alimport is currently buying 750,000 tonnes a year of U.S. corn, he said. Other major U.S exports are wheat and rice.
At the request of the Senate Finance Committee, the U.S. International Trade Commission is investigating the sanctions against Cuba to see if they are detrimental to U.S. interests. The commission will issue its report by the end of June.
