California delegation travels to Cuba and returns with hope for trade
California delegation travels to Cuba and returns with hope for trade
A group of California agriculturists led by the state's secretary of agriculture, A.G. Kawamura, traveled to Cuba in January, and the produce representatives returned believing that there is opportunity to do some business.
Mr. Kawamura's group represented a wide range of commodities, including fruits, vegetables, nuts, raisins, cheese, rice and cotton. He told The Produce News that "California was following the lead of 18 other states in attempting to establish a trading relationship with Cuba."
Mr. Kawamura, who was a well-known strawberry grower-shipper before being appointed to the position of secretary of the California Department of Food & Agriculture in 2003, said that it was a "successful trip and an eye opener." He said that Cuba is home to 11 million people and that it is the last undeveloped market in North America.
Robert Tse, director of trade for CDFA, who accompanied the group on the trade mission, detailed Cuba's potential buying power. Mr. Kawamura said that the report showed that Cuba purchases more than $1 billion worth of food annually from around the world. Although 60 percent of that comes from the United States, California firms accounted for only a little more than 1 percent ($735,000) of the U.S. total.
"Cuba purchases about $180 million worth of California-type products," Mr. Kawamura said, referring to agricultural products purchased by Cuba elsewhere that California ranchers and farmers produce. "We wanted to make sure that they knew that California could supply these products."
Mr. Kawamura believes that there is good potential to develop the Cuba market, especially as its tourism grows. He said that there are two distinct markets: high-end products for the tourist trade and staples bought by the government for the Cuban people.
"It is a marketplace that should not be ignored," he added.
The fruit and vegetable producers on the trip interviewed by The Produce News echoed Mr. Kawamura's sentiments.
Alex Teague, senior vice president for the Limoneira Co. in Santa Paula, CA, said that he specifically went on the trip to judge the potential for shipping fresh lemons. "I do think we can do some business," he said. "I expect that we will apply for a license once they have decided that they do want to buy our lemons."
The U.S. government, which has long embargoed trade with Cuba, did open the market in 2000 for food and agricultural products. Any product sold to the island nation must be fully paid for in cash before it enters Cuba, and U.S. exporters must obtain a license from the U.S. State Department.
Mr. Teague said that during the first couple of days of the trade mission, government officials who met with the group did not seem to think that there was a market for the yellow lemon. Cuba produces limes, and the officials seemed skeptical that a lemon would be used differently.
"But Cuba has a centralized distribution system, and finally we met the people who actually buy the produce," said Mr. Teague. "They talk to the hotels and restaurants [in Cuba] and they knew that they wanted a yellow lemon."
The Limoneira executive said that within the next six months, he expects his firm to apply for and receive a license (a two- to four-week process) and send a load of lemons to Cuba.
Because of the U.S. policy that prohibits credit from being extended to the Cuban import company, Alimport, Mr. Teague said that the risk is minimal, as the product will not be shipped until it is ordered and paid for. While that does eliminate risk, in the long run, it could hamper the development of the market.
"I think the United States is the only country that does not extend credit to Cuba," Mr. Teague said.
That could come into play if lemon sales grow and competitors from other countries, such as Argentina or Spain, can offer a competing product without the lack-of-credit issue.
Mr. Teague said that Cuba appears to have a local supply of both oranges and grapefruits that are very good tasting, if not cosmetically pleasing. He doubted there was a potential market for these other citrus items.
John Kreick, vice president of exports for Pandol Bros. in Delano, CA, was also cautiously bullish on the potential for grape sales into Cuba. "I'd say this was a fact-finding mission for us, but I do think we can do business there. We are going to pursue it and see where it takes us."
Though the decision had not yet been made, Mr. Kreick said that Pandol would probably apply for a license so the company could send at least one load of grapes to Cuba, probably shipped from the port of Houston. "We saw no fresh grapes during our trip," he said. "I don't think the general population can afford them, but we could do some business with the hotels and restaurants."
Like the others interviewed, the Pandol export official said that the best thing about the trip was that the group made the necessary contacts with the actual firm that would be buying and importing the California products. Because of the centralized buying system, only Alimport is allowed to import these food items for Cuba.
"We had excellent meetings with the government officials in charge of this program," said Mr. Kreick. "Now that we are back home, we know exactly who to call to see if we can do business."
Mr. Kreick said that he considers Cuba just another potential customer. "We are always trying to establish new markets and new customers," he said, explaining his interest in the trade mission. "You never know until you go to a market and ask if they are going to be a customer or not."
Tom Nunes Jr., president of The Nunes Co. in Salinas, CA, which grows and ships many different vegetable commodities, was not certain that the trip will result in any business, but he thought "it was the opportunity of a lifetime" nonetheless.
"I thought it was a privilege to accompany [Mr. Kawamura], and it was a great way to educate myself about Cuba. I went there with no expectations; I just didn't know what to expect."
What he found was well-educated people who generally seemed happy and well taken care of. He looks at Cuba as a potential new market and suspects that Nunes will at least ship one load to see what kind of interest there is. However, Mr. Nunes expects that selling fresh vegetables would be be a long-term project, as there are very few fresh vegetables in the marketplace currently. "They eat a lot of frozen and canned vegetables," he said. "Fresh is going to be new to them."
Mr. Kawamura said that only a limited number of suppliers could accompany him on this trip according to U.S. rules regulating such trips, so California will consider conducting another trade mission in the future. He said that CDFA is also considering exhibiting at a Cuba trade show that is scheduled for November.
Mr. Kawamura's group represented a wide range of commodities, including fruits, vegetables, nuts, raisins, cheese, rice and cotton. He told The Produce News that "California was following the lead of 18 other states in attempting to establish a trading relationship with Cuba."
Mr. Kawamura, who was a well-known strawberry grower-shipper before being appointed to the position of secretary of the California Department of Food & Agriculture in 2003, said that it was a "successful trip and an eye opener." He said that Cuba is home to 11 million people and that it is the last undeveloped market in North America.
Robert Tse, director of trade for CDFA, who accompanied the group on the trade mission, detailed Cuba's potential buying power. Mr. Kawamura said that the report showed that Cuba purchases more than $1 billion worth of food annually from around the world. Although 60 percent of that comes from the United States, California firms accounted for only a little more than 1 percent ($735,000) of the U.S. total.
"Cuba purchases about $180 million worth of California-type products," Mr. Kawamura said, referring to agricultural products purchased by Cuba elsewhere that California ranchers and farmers produce. "We wanted to make sure that they knew that California could supply these products."
Mr. Kawamura believes that there is good potential to develop the Cuba market, especially as its tourism grows. He said that there are two distinct markets: high-end products for the tourist trade and staples bought by the government for the Cuban people.
"It is a marketplace that should not be ignored," he added.
The fruit and vegetable producers on the trip interviewed by The Produce News echoed Mr. Kawamura's sentiments.
Alex Teague, senior vice president for the Limoneira Co. in Santa Paula, CA, said that he specifically went on the trip to judge the potential for shipping fresh lemons. "I do think we can do some business," he said. "I expect that we will apply for a license once they have decided that they do want to buy our lemons."
The U.S. government, which has long embargoed trade with Cuba, did open the market in 2000 for food and agricultural products. Any product sold to the island nation must be fully paid for in cash before it enters Cuba, and U.S. exporters must obtain a license from the U.S. State Department.
Mr. Teague said that during the first couple of days of the trade mission, government officials who met with the group did not seem to think that there was a market for the yellow lemon. Cuba produces limes, and the officials seemed skeptical that a lemon would be used differently.
"But Cuba has a centralized distribution system, and finally we met the people who actually buy the produce," said Mr. Teague. "They talk to the hotels and restaurants [in Cuba] and they knew that they wanted a yellow lemon."
The Limoneira executive said that within the next six months, he expects his firm to apply for and receive a license (a two- to four-week process) and send a load of lemons to Cuba.
Because of the U.S. policy that prohibits credit from being extended to the Cuban import company, Alimport, Mr. Teague said that the risk is minimal, as the product will not be shipped until it is ordered and paid for. While that does eliminate risk, in the long run, it could hamper the development of the market.
"I think the United States is the only country that does not extend credit to Cuba," Mr. Teague said.
That could come into play if lemon sales grow and competitors from other countries, such as Argentina or Spain, can offer a competing product without the lack-of-credit issue.
Mr. Teague said that Cuba appears to have a local supply of both oranges and grapefruits that are very good tasting, if not cosmetically pleasing. He doubted there was a potential market for these other citrus items.
John Kreick, vice president of exports for Pandol Bros. in Delano, CA, was also cautiously bullish on the potential for grape sales into Cuba. "I'd say this was a fact-finding mission for us, but I do think we can do business there. We are going to pursue it and see where it takes us."
Though the decision had not yet been made, Mr. Kreick said that Pandol would probably apply for a license so the company could send at least one load of grapes to Cuba, probably shipped from the port of Houston. "We saw no fresh grapes during our trip," he said. "I don't think the general population can afford them, but we could do some business with the hotels and restaurants."
Like the others interviewed, the Pandol export official said that the best thing about the trip was that the group made the necessary contacts with the actual firm that would be buying and importing the California products. Because of the centralized buying system, only Alimport is allowed to import these food items for Cuba.
"We had excellent meetings with the government officials in charge of this program," said Mr. Kreick. "Now that we are back home, we know exactly who to call to see if we can do business."
Mr. Kreick said that he considers Cuba just another potential customer. "We are always trying to establish new markets and new customers," he said, explaining his interest in the trade mission. "You never know until you go to a market and ask if they are going to be a customer or not."
Tom Nunes Jr., president of The Nunes Co. in Salinas, CA, which grows and ships many different vegetable commodities, was not certain that the trip will result in any business, but he thought "it was the opportunity of a lifetime" nonetheless.
"I thought it was a privilege to accompany [Mr. Kawamura], and it was a great way to educate myself about Cuba. I went there with no expectations; I just didn't know what to expect."
What he found was well-educated people who generally seemed happy and well taken care of. He looks at Cuba as a potential new market and suspects that Nunes will at least ship one load to see what kind of interest there is. However, Mr. Nunes expects that selling fresh vegetables would be be a long-term project, as there are very few fresh vegetables in the marketplace currently. "They eat a lot of frozen and canned vegetables," he said. "Fresh is going to be new to them."
Mr. Kawamura said that only a limited number of suppliers could accompany him on this trip according to U.S. rules regulating such trips, so California will consider conducting another trade mission in the future. He said that CDFA is also considering exhibiting at a Cuba trade show that is scheduled for November.
