US Food/Ag Exports To Cuba In May Decrease By 27%; And By 24% For First Five Months Of 2016

MAY FOOD/AG EXPORTS DECREASED 27%- Exports of food products & agricultural products from the United States to the Republic of Cuba in May 2016 were US$19,384,881.00 compared to US$26,420,677.00 in May 2015.  For the period January-May 2016 compared to January-May 2015, exports decreased by 24%.  

The Trade Sanctions Reform and Export Enhancement Act of 2000 (TSREEA) re-authorized the direct commercial (on a cash basis) export of food products (including branded food products) and agricultural products (commodities) from the United States to the Republic of Cuba, irrespective of purpose.  The TSREEA does not include healthcare products, which remain authorized by CDA.

The data represents the U.S. Dollar value of product exported in April 2016 from the United States to the Republic of Cuba under the TSREEA.  The data does not include transportation charges, bank charges, or other costs associated with exports; the government of the Republic of Cuba reports unverifiable data that includes transportation charges, bank charges, and other costs.    

The primary reasons for the cumulative reduction in United States exports to the Republic of Cuba 1) lack of foreign exchange due to commercial and economic decisions of the government of the Republic of Cuba which lessen its ability to earn foreign exchange.  2) financial largess of the government of Venezuela lessens the interest of the government of the Republic of Cuba to purchase products from the United States, regardless of cost, quality, or delivery considerations.  3) financial largess of the government of the People‚Äôs Republic of China lessens the interest of the government of the Republic of Cuba to purchase products from the United States, regardless of cost, quality, or delivery considerations.  4) re-emergence and/or continuation of import relationships (barter, substantial credits, political motivation) with the governments of Brazil, Argentina, Vietnam, Mexico, Spain, Mexico, Canada, Russia, Iran, New Zealand, and France amongst other countries.  5) preference to purchase products from government-controlled entities, which provide more favorable payment terms and less publicity when payment terms are not honored, which is expected given the lack of foreign exchange of government of the Republic of Cuba.  6) efforts (which had been successful, but had lessened in their effectiveness) by the government of the Republic of Cuba to increase the motivation of United States-based companies, organizations; state and local government representatives; and Members of the United States Congress to be more visible in their lobbying efforts for changes in United States policy, law, and regulations.   

Government of Vietnam-operated Vinafood 1 and Vinafood 2 have provided payment terms to Republic of Cuba government-operated Empresa Cubana Importadora Alimentos (Alimport), under the auspice of the Ministry of Foreign Trade of Cuba (MINCEX), of up to two years to pay for rice (25% to 30% broken).  United States producers can provide this product; payment terms, however, without the use of government programs, would be cash-on-delivery to 30 days; and for credit-worthy customers, generally not exceed sixty days to ninety days.

The reduction in exports from the United States to the Republic of Cuba is not the result of changes in payment regulations implemented by the OFAC during later years of the Bush Administration, which had permitted an expansive definition of payment terms.  The payment regulations were again made expansive in January 2015.