The Canadian Wheat Board is reacquainting itself with a long-lost customer.
Earlier this month, at the Havana International Trade Fair, the agency signed a $20 million deal with Alimport, the Cuban importing agency for agricultural products, to provide 100,000 tonnes of Canada Western Red Spring wheat in 2005-06.
“We are very pleased that Cuba has renewed its interest in high quality Canadian wheat,” said CWB president Adrian Measner.
The communist country was a key buyer of Canadian spring wheat in the 1980s, purchasing 300,000 to 600,000 tonnes each year throughout that decade.
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But sales slowed to a trickle following the 1991 demise of the Soviet Union.
“When that happened, Cuba ran into some problems buying on credit and we weren’t selling to them very much,” said CWB spokesperson Maureen Fitzhenry.
Securing favourable credit terms became more important than buying top quality wheat, forcing Cuban buyers to obtain more grain from Europe.
With the exception of 1997-98, when Canada sold 101,000 tonnes of wheat to Cuba, sales to the island nation dropped substantially in the 1990s and the early part of this decade, with exports averaging 43,000 tonnes a year over the past 15 years.
But in 2000, Cuba’s trade patterns were radically altered once again, this time by the United States Congress, which lifted a food embargo that had been in place since 1962.
Since then the U.S. has rapidly become Cuba’s largest food supplier, accounting for one-third of its $1.5 billion in food imports for 2005. And that is despite an ongoing restriction where all deals between the two countries must be done on a cash-only basis.
Canada is also taking advantage of Cuba’s new willingness to conduct cash business, regaining some of the ground it lost in the 1990s.
The Nov. 1 deal with Alimport comes on the heels of a 77,000 tonne sale made in September, bringing Canada’s 2005-06 export total to 177,000 tonnes of spring wheat.
While still a far cry from 1980s levels, that total represents nearly five times the average volume of Canadian wheat sent to Cuba over the past five years.
“The Cubans have told me that they value the consistent quality of our hard red spring wheat, particularly in blending to improve the milling attributes of other grain,” said Measner.
