The U.S. is again trying to harden the U.S. trade embargo against Cuba. The trade embargo is called “el bloqueo” or “the blockade” by the Cubans and is basically a refusal to trade most goods with the country. President John F Kennedy placed the ag embargo on October 19, 1960.
In the past couple of years, the U.S. was starting to soften to Cuba and Illinois got particularly excited about the opportunity to trade with the country. Not only do they desperately need the food we could provide, but they are also a natural market for the U.S. being so close. AND, with Illinois positioned right on the Mississippi River, we are the natural, lowest cost provider to get food and grain to them.
But now, as the U.S. again begins to rethink trade with Cuba, Argentina and Brazil will be able to continue providing what the Cubans need, despite added transit time, higher freights and additional pest control costs.
Cuba is a 900,000 metric ton (35.4 million bushels) market for corn. Based on recent export sales, capturing this demand would make Cuba the 11th largest customer for U.S. corn. In addition, free flow of grain to Cuba would help capture sales to the Dominican Republic and even Puerto Rico, worth hundreds of millions of dollars per year.
Capturing the Cuban market wouldn’t change everything for Illinois corn farmers, but it would make an impact. And when corn prices are below the cost of production (and Cubans are starving for real food!), every little bit helps.
Read the full article here: http://www.grains.org/news/20170706/hot-topics-cuban-embargo-will-hurt-grain-trade-despite-continued-engagement
ICGA/ICMB Marketing Manager