(July 3) Like free enterprise and American investment, the crunch of U.S. apples has been missing in Cuba for 40 years.
Northern Fruit Co. Inc., Wenatchee, Wash., ended the four-decade drought of U.S. apples when it sent its first container load shipment of apples on the 10-day journey to Cuba on July 1.
The apples will be trucked to Gulfport, Miss., and then shipped by container ship to Cuba.
The sale marked the first fruits of years of work by some members of Congress to expand agriculture trade. Former President Clinton signed the Trade Sanction Reform and Export Enhancement Act of 2000, which relaxed some of the economic sanctions on trading with Cuba. Cuba has purchased other U.S. agriculture goods in recent months, including grains and dry peas.
All deals must be in cash, and U.S. banks can’t be directly involved in the transaction with the Cuban government. Although the U.S. sanctions imposed in 1961 against Cuba were relaxed in October 2000 to allow shipments of food and medicine, the law still prohibits the third-party financing by banks that is routine in international trade.
Jorge Sanchez, salesman for Northern Fruit Co., said the container of red delicious premium and fancy grade fruit was expected to arrive in Cuba July 11.
“We’re planning on flying over to Cuba when the shipment arrives,” he said. The shipment also included sample cartons of granny smith, fuji and golden delicious.
Sen. Maria Cantwell, D-Wash., was on hand for the send-off for the container, which was loaded at the Washington Apple Commission in Wenatchee. Cantwell told The Associated Press that legislation is pending in Congress to allow third-party financing of sales to Cuba. According to a report by the Cuba Policy Foundation released in January, the U.S. economy is losing up to $1.24 billion a year in agricultural exports because of the sanctions.
The original contract Northern Fruit had with the Alimport, Cuba’s state-run agency, called for 15 containers (15,000 cartons) of fruit to be shipped to Cuba.
“Whether we get up to 15 or not is hard to say. It depends on if we have the fruit to sell,” he said.
There are special requirements on sale of U.S. food to Cuba, government and industry sources said.
Sanchez said a bank in Europe will facilitate the transaction. The contract calls for Cuba to transfer the money when the product arrives in Gulfport. He said Northern is confident the financial arrangements won’t hold any surprises.
“(Cuba) wants this to happen, and hopefully we can have a long-term deal with them,” he said.
A mid-June visit by representatives of the U.S. Department of Agriculture’s Animal and Plant Health Inspection Service and Cuba’s Centro Nacional Sanidad Vegetal settled phytosanitary requirements for the exportation of Washington state apples and pears to Cuba.
Likewise, New York apple growers received phytosanitary clearance on June 19. New York and Washington are the only states that have clearance to ship apples to Cuba, according to the USDA.
Jim Allen, president of the New York Apple Association, Fishers, said he was uncertain whether New York apple shippers would send product to Cuba this summer or wait until the new crop is harvested.
“We’ve got clearance; it’s just a matter of negotiation with Alimport,” he said.
He said U.S. officials are tying to approve shipments from a northern port such as Dover, Del., in addition to Gulfport. That would make shipments from New York easier, he said.
Mark Powers, vice president of the Northwest Horticultural Council, Yakima, Wash., said he believes at least two other shippers in Washington will be approved for licenses from the Department of Commerce. That process is time-consuming and difficult , he said.
In the near term, sales of U.S. apples to Cuba could total $500,000 annually, the USDA reports.
Where the first container leads is uncertain, but Sanchez expressed a desire to learn more about the Cuban market.
“We had to start somewhere. It gives us a chance to find out what their needs are,” Sanchez said.
Allen said the potential of the Cuban market is unknown. With 13 million people and nary an apple tree, there is at least room for optimism.
Powers said Cuba as an apple market may be similar to the Dominican Republic, which rated as the 10th-largest market with about 300,000 cartons of imports last year.
At the same time, he said the challenges of doing trade with Cuba — poor infrastructure and a struggling economy — make it a market that won’t explode overnight.
Cuban tariffs on U.S. apples and pears don’t exceeded 17%, he said.
“It’s not often we get to open a new market. It’s an exciting opportunity,” Powers said.
Jim Cranney, interim president of the U.S. Apple Association, Vienna, Va., said Cuba could be a desirable market.
“We hope the that initial shipments can lead to more activity,” he said.