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Rice exporters see tremendous market in Cuba
CubaNews / October 2002

By Larry Luxner

HAVANA — U.S. rice exporters have signed contracts worth about $12 million to deliver 120,000 metric tons of rice to Cuba as a result of last month’s U.S. Food & Agribusiness Exhibition in Havana.

That’s over and above the 75,000 tons shipped by U.S. producers to Cuba over the last nine months, according to Marvin Lehrer, director of Latin America programs for the USA Rice Federation.

The newest contracts with Alimport, a unit of Cuba’s Ministry of Foreign Trade, call for U.S. producers to send Cuba 90,000 tons of paddy rice and 30,000 tons of milled rice.

Of the total, some 60,000 tons of rice will be supplied by The Rice Company of Rose-ville, Calif., another 35,000 tons of rice by Archer Daniels Midland of Decatur, Ill., and the remaining 25,000 tons by Riceland Foods Inc. of Stuttgart, Ark.

Those three companies and two others — Houston-based American Rice Inc. and Fal-con Rice Mill of Crowley, La. — participated in the show, as well as several food brokers that sell rice along with other commodities.

“Rice is a food staple in Cuba, so certainly there’s an opportunity for us,” said Terry L. Harris, VP of marketing at Riceland Foods, in an interview after the expo. “We’re competitively priced, and we offer a much shorter transit time than Far East producers.”

At present, Cuba consumes about 600,000 tons of rice a year. But because Cuban rice production has fallen dramatically in recent years, the island now imports 90% of its needs — about 540,000 tons a year — from Vietnam and China.

“Cubans not only eat a lot of rice, but prefer U.S. varieties and quality,” said Lehrer. “We have a tremendous marketing opportunity in Cuba, and our industry wants to make the most of it.”

Arkansas and Louisiana are the leading U.S. rice-producing states, with rice also being grown in Missouri, Mississippi, Texas and California. Most Cuba-bound rice is being shipped from New Orleans.

Cuba has the potential to buy 20% of the 2.8 million tons of rice U.S. producers export every year, but for years couldn’t do so because of the embargo, which Lehrer said has cost American rice farmers and millers an estimated $3 billion in lost sales.

“Rice is an inoffensive product. It’s not controversial,” Lehrer told CubaNews. “It’s something they don’t grow very much of, and it’s something we have a lot of.” Lehrer added that “the United States consumes only half of the rice we produce, so for us, Cuba is potentially a huge market.”

Before 1961, Cuba was the No. 1 market for U.S. long-grain rice, he pointed out. “If we were to eventually get a lion’s share of the market, Cuba could return to what it was before,” said the Texas-based rice executive.

Adds John Mentis, the organization’s VP for domestic and international promotion: “In just nine months, U.S. rice has made its way into normal food distribution channels in Cuba, including homes, schools and restaurants.

“Given the tough times many in the industry are experiencing, greater market access is a high priority,” he said. “We believe that if current export restrictions are eased, we could increase sales 10 times over current levels.”

Besides its participation at the show, USA Rice sponsored a cooking contest with Cuban chefs at Havana’s Hotel Palco, as well as a “Rice Goes to School” project where children learned about nutrition and U.S. rice through classroom activities.

Lehrer told CubaNews that “these are the first such activities sponsored by a U.S. commodity group to take place in Cuba.”

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