France Monopolizes in Cuban Wheat Import Market
Reading time: 2 minutes
In October 2022, the Technical Director of the Cuban Company of Wheat Milling, Yanet Lomba, explained: To guarantee the demand for flour that the country needs, we must receive three to four shipments per month, but only one or two ships of Wheat per month are being received.
The entity manages four of the five mills that operate in Cuba — installed in Havana (2), Cienfuegos (1), and Santiago de Cuba (1) — and supplies raw materials to the one managed by the mixed company Industrial Molinera de La Habana SA (IMSA). The day that Lomba gave statements to Cubadebate (October 18, 2022), only the Santiago industry was operating to grind a “level of Wheat” that would run out in a few hours.
The unloading of a ship with 20 thousand additional tons was planned, but that volume was barely enough to cover the demands of the basic basket until the beginning of November. Priced at over $650 a ton, the purchase of each Wheat shipment involved paying between $14 million and $16 million. The situation worsened in 2022 and would continue in the immediate months, anticipating the official: “There was no stable financing for the purchase of Wheat.”
The lack of foreign exchange is only part of the problem. Many banks refuse to manage payments to suppliers and shipping companies for fear of US sanctions, Maidel Linares, the First vice president of the Food Industry Business Group (GEIA), which coordinates the work of the milling companies, noted.
The 717,345 tons of Wheat and meslin (a mixture of Wheat and rye intended mainly for making bread) imported by Cuba in 2019 costed almost 200 million dollars. Each ton of cereal was then quoted at 279 dollars. But the pandemic and the war in Ukraine plunged prices into a hitherto unstoppable inflationary spiral. In 2021, for the purchase of 562,853 tons, the island paid 216 million dollars (385 dollars per ton). In 2022, the estimated import of 415,000 tons of Wheat required the disbursement of no less than 270 million dollars.
Each rise in prices in the international market has forced adjustments by the Ministry of Economy and Planning. To preserve regulated deliveries, in the last two years, the allocation of resources to the animal feed and meat industries —also greatly affected by the shortage of soybeans and corn, and confectionery production have been drastically reduced.
Reducing customs duties would be a positive step in the case of Wheat flour and other confectionery raw materials. These rates are part of the CIF/CIP rates —which include the value of the merchandise, its insurance, and transportation to the destination port — and in Cuba, they come to represent up to a third of the final amount of private imports. Not all that money is used to pay tariffs and customs clearance, but a part is, becoming an additional cost passed on to consumers.
Future prices in the world’s leading cereal markets anticipate a year of stability in Wheat prices. For Cuba, it is good news. But from there, overcoming the current shortage crisis is a distance that can only be overcome in the short term by combining the public-private initiative.
Wheat Import in Cuba
According to the AgFlow data, Cuba imported 85,000 tons of Wheat from France in Jan-Apr 2023. In 2021, Cuba imported Wheat for $153 million, becoming the 68th largest importer of Wheat in the world. In the same year, Wheat was Cuba’s 2nd most imported product. Cuba imports Wheat primarily from: France ($112 million), Canada ($26.9 million), and Germany ($14.2 million).
Other sources: ON CUBA NEWS
Try AgFlow Free
Access Free On Updates for Corn, Wheat, Soybean,
Barley, and Sunflower Oil.
No Credit Card Required & Unlimited Access In Time