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Stagnant US exports to Cuba belie fair's optimism

Associated Press Modified: November 10, 2012 at 9:45 pm •  Published: November 10, 2012
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While purchases of some U.S. goods have held steady, such as poultry and soybeans, others have tanked, including branded processed foods and grains.

The Spartan booth manned by Kevin McGilton, vice president for sales of Arkansas-based Riceland, was a case in point.

U.S. rice exports to Cuba totaled 20,000 to 30,000 metric tons a year before the economic crisis, but were zero last year, he said. Vietnamese government rice companies have long beat out U.S. suppliers by offering "broken" rice that doesn't look as pretty as U.S. rice but is cheaper. The country also has been extending multiyear credit terms.

Cuba "didn't have the hard currency to pay cash in advance, which is what they have to do with U.S. companies," McGilton said, adding that the only promising leads he had during the trade show this week came from other countries, such as Mexico.

Still, those doing business with Havana kept up a cheery tone at the fair, which included 500 exhibitors from overseas and ended Saturday.

The pavilion that housed U.S. delegations bustled as workers in matching T-shirts dumped fistfuls of Reese's Peanut Butter Cups into the hands of conventioneers and handed out canvas bags stuffed with Skittles candies. Cubans took turns posing for pictures with a person dressed as an oversize Hershey's chocolate bar.

Conventioneers praised Alimport for professionalism and savvy, and played down the importance of the credit restrictions.

Richard N. Waltzer, president of Procurement Systems Inc., said a recent U.S. policy allowing Cuban-Americans to send more money to islanders has increased their ability to purchase the U.S. brand names his company distributes.

PSI's Cuba business has grown 30 percent a year for the last decade, and Waltzer was optimistic about Cuba's expanding tourism industry and growing small private enterprise under President Raul Castro's reforms.

"They're modeling their new economic model after Vietnam and China, so in the future it's opening up for capitalism," he said. "And bringing in these great American brands, I believe, is going to take it to the next level."

Todd P. Haymore, secretary of agriculture and forestry for Virginia, which shipped $65 million in agricultural goods to Cuba last year, said the island is a consistent top 15 market.

But businesspeople back home see bigger possibilities if embargo rules are simplified.

"They feel like you might lose out on a sale or capturing additional sales because of these additional fees, additional turns of currency. ... Every time you go from one country to the next there's always a loss," Haymore said. "Someone's gaining a piece of that pie that's not going into your back pocket."

Those at the fair were also jockeying to be in position for an unknown future date when the U.S. sanctions might disappear altogether.

"Cuba is becoming a more and more important market for U.S. companies. ... Everybody wants to have some kind of presence," said Hector Rainey, managing director of Intervision Foods of Atlanta. "If something changes all of a sudden, they have an angle here."

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Peter Orsi on Twitter: www.twitter.com/Peter_Orsi