Storm-Racked Cuba Buying U.S. Food

U.S. grain industry giants Cargill Inc. and Archer Daniels Midland Co. on Wednesday announced the first sale of U.S. food to Cuba in 41 years, sparking hopes for a thaw in Cold War tensions and more food sales.

The communist-run island, devastated by Hurricane Michelle this month, asked the United States for food last week. The storm, the worst to hit the island in 50 years, killed five people, destroyed thousands of homes and damaged crops.

The United States slapped an embargo on trade with Cuba soon after President Fidel Castro swept to power in 1959. But last fall, Congress enacted legislation that eased some restrictions to allow cash sales of food and medicine.

“There have been some indications this may not be the last of what they need in the light of the damage done by the hurricane,” said Larry Cunningham, a spokesman for Archer Daniels Midland, the top U.S. grain processor.

He said ADM--through its joint venture with Farmland Industries, the nation’s largest farmer-owned cooperative--will supply Cuba with “tens of thousands” of metric tons of wheat, corn, soybeans, rice and soymeal, an animal feed.

He said the products were expected to be shipped to Cuba in the next week to 10 days.

Cunningham declined to disclose the exact amount of each product the company sold to Cuba but said the sales were all done on a cash basis because of financing restrictions.

The legislation enacted last year does not allow the U.S. government and banks to finance sales to cash-strapped Cuba, which lies just 90 miles off the Florida coast. Such U.S. financing is a common practice with dozens of other countries in need of food aid.

Riceland Foods Inc. President and Chief Executive Richard Bell said the company sold rice to Cuba but declined to disclose the amount.

Dawn Forsythe, a spokeswoman for U.S. Wheat Associates, an organization that promotes wheat exports, said, “This is probably the first time in their lifetime younger farmers are seeing the sale of U.S. wheat to Cuba.”

She added, however, that there were several sticking points in opening the door to regular sales of wheat and other U.S. products to Cuba, one of which was the financing restrictions.

Van Yeutter, director of international business development at top U.S. grain exporter Cargill, said the company had signed an agreement to sell a total of 44,000 metric tons of U.S. food, comprising 20,000 tons of wheat, 19,000 tons of corn and 5,000 tons of crude vegetable oil.

He said the products were expected to be shipped to Cuba in January and February. “We have finalized a deal with Cuba, subject to U.S. government approval,” he said.

Bob Papanos, vice president of international programs at the U.S. Rice Producers Assn., said there still were some concerns that Cuban exiles living in Miami who are adamantly opposed to Castro’s government could attempt to derail the food shipments to Cuba.