U.S. food exports to Cuba dwindle under Bush

By Anthony Boadle

HAVANA (Reuters) - Cuba will close deals for Canadian wheat and Vietnamese rice at the annual trade fair in Havana that opened on Monday, while U.S. food sales dwindle.

American vendors and Cuban officials blamed the tightening of U.S. financial sanctions against Communist Cuba, a policy U.S. President George W. Bush reaffirmed two weeks ago.

"Vietnam gives them credit, we don't," said Marvin Lehrer, the USA Rice Federation's director for Latin America, as he handed out hot samples of chicken-flavored long-grain rice.

Sales of U.S. rice to Cuba dropped to 80,000 tones last year from 175,000 tonnes in 2005 and prospects are not good for this year, Lehrer said.

During the fair, Cuba's food import agency Alimport will buy 200,000 tonnes from Vietnam under a contract worth $100 million, its president Pedro Alvarez said.

Seven years ago, the U.S. Congress allowed agricultural sales to Cuba as an exception to the trade embargo enforced against Fidel Castro's government after his 1959 revolution.

Sales of U.S. food -- which Cuba must pay for in cash -- have totaled $1.8 billion, but business peaked in 2004 when the Bush administration made transactions harder by requiring payment before shipment. Sales peaked at $392 million in 2004 and declined to $340 million last year.

Cuba has turned to Brazil, Argentina and Canada for grains, soybeans and chicken, said Alvarez, who will sign a contract for 150,000 tonnes of Canadian wheat on Tuesday.

"American producers are been hurt by the embargo. Trade with the United States is uncertain because Cuban payments get blocked," he said.

Bush rejected any easing of U.S. sanctions against Cuba in a speech on October 24 in which he said the transfer of power from ailing Fidel Castro to his brother Raul amounted to merely "exchanging one dictator for another."

Tighter enforcement of sanctions by his administration has led international banks to shun dollar transactions with Cuba and close offices in Havana, making Cuban payments harder.

The number of U.S. companies attending this year is down to 100 from 150 in 2006. Some exhibitors who had planned to have stands at the fair stayed away.

Farm state officials traveled to Havana to help reverse the fall in business, including Nebraska Gov. Dave Heineman, on his second visit to Cuba this year, and agricultural commissioners from Minnesota, Gene Hugoson; and Alabama, Ron Sparks.

"We haven't gone downhill, our sales are steady," said Sparks, whose state has sold poultry, utility poles, some cotton and soybeans to Cuba.

But the shipping company that handles most of the freight to Cuba sees little chance of business picking up while Bush remains in the White House.