Saturday, March 21, 2009

U.S. rice growers see Obama loosening Cuba embargo

Sat Mar 21, 2009 12:07pm EDT

By Pascal Fletcher

MIAMI (Reuters) - U.S. rice growers expect President Barack Obama to further ease Washington's trade sanctions against Cuba this year and say this could lift U.S. rice sales to the island to at least 200,000 tonnes annually.

U.S. Rice Producers Association President and CEO Dwight Roberts told Reuters he fully expected Obama to enlarge on "baby steps" taken by the administration and Congress earlier this month which softened some of Washington's travel and trade restrictions against the communist-ruled Caribbean state.

"I definitely expect we will see a continuing process of easing the trade restrictions ... that is what we are hearing from high-level people in Washington," Roberts said in a phone interview in Miami late on Friday.

Speaking after attending a conference on potential U.S.-Cuba trade, Roberts said while he did not foresee an immediate end to the 47-year-old U.S. trade embargo against Cuba, he did anticipate the removal of "bits and pieces."

Amendments to the embargo in 200O opened up U.S. food sales to the island, including rice. American rice shipments to Cuba rose to 175,000 tonnes in 2004, but in recent years fell off because of tighter rules introduced by the previous Bush administration, compounded last year by soaring world prices.

Roberts predicted that pressure on Obama and Congress for a further loosening of the Cuba embargo would come this year from "everyone in agriculture and beyond."

"If we remove the obstacles -- not even a total dropping of the embargo -- if we were able to give credit, have direct banking links, etcetera, we could easily do 200,000 tonnes (of U.S. rice sold to Cuba) in the first year," he said. This could rise to "several hundred thousand" tonnes, he added.

Roberts said this compared with around 30,000-35,000 tonnes shipped last year, when he said inflated prices meant "we priced ourselves out of the Cuba market." Cuba turned to traditional suppliers like Vietnam which offered better terms.

Successive U.S. administrations have tried to isolate Cuba for nearly half a century through the trade embargo. Critics say this has failed to foster political change on the island.

Since the inauguration of Obama, who has promised diplomatic overtures to Havana and an easing of travel restrictions, calls have been growing inside and outside the United States for efforts to improve relations with Cuba.


Roberts said Obama could make such a move during an April 17-19 Summit of the Americas in Trinidad and Tobago which will bring together the U.S. president and regional leaders.

"At this event coming in April with the leaders of the Western hemisphere, there will be a lot of pressure on Obama to come out with something on relations with Cuba," he said.

He pointed to Obama's comments this week offering a fresh start with Iran, which indicated he wanted to improve ties with countries long considered rogue states by Washington.

Roberts said the Cuba provisions recently passed by Congress as part of a spending bill represented small steps in easing travel and trade restrictions on the island.

But he added the Treasury Department was "not interpreting the loosened rules as Congress intended" by insisting that U.S. food sellers receive cash from Cuba in advance before the loading of food shipments to the island.

This, Roberts said, "puts the Cubans at considerable risk" because such shipments theoretically could still be seized under compensation claims against Cuba in U.S. courts.

He said some U.S. senators this week wrote to Treasury complaining about its interpretation of the Cuba provisions in the 2009 omnibus spending bill.

Roberts said that easing the embargo would allow U.S. rice producers to take market share in Cuba from Vietnam, which offers favorable credit terms to the Cubans, but whose shipments included lower-category "broken" rice.

"The Cubans know rice, prefer quality ... Even if we're a bit higher (in price), they will buy U.S. rice," he said.

(Editing by Vicki Allen)

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