Cuban Trade Deficit Improves
Caribbean Island’s Most Popular Exports & Imports in 2006
Venezuelan oil is the leading import into Castro's island, while Netherlands, Canada & China are major buyers of Cuban exports including sugar, nickel, tobacco & fish.
According to Cuba’s Economy and Planning Minister Jose Luis Rodriguez, the largest Caribbean island made significant progress in improving its trade deficit balance in 2006.
Cuba grew its exports to US$2.76 billion in 2006. Cuban imports during the same period rose to $9.42 billion, resulting in a $6.7 billion trade deficit. Exports continue to increase at a much faster rate than imports in both 2006 and 2007, reversing the trend prior to 2004 in which Cuba’s spending on imports accelerated far ahead of the growth rate for its exported goods.
Home to 11.4 million people, Cuba’s leading exports are sugar, nickel, tobacco, fish, medical products, citrus fruits and coffee beans. Top trading partners for Cuban exports include the Netherlands (21.8% of 2006 total), Canada (21.6%), China (18.7%) and Spain (5.9%).
Topping the list of Cuban imports are petroleum, food, chemicals as well as machinery and equipment. Venezuelan oil accounts for the most Cuban imports (26.6% of 2006 total), followed by China (15.6%), Spain (9.6%), Germany (6.4%), Canada (5.6%), Italy (4.4%), the United States (4.3%) and Brazil (4.2%).
Reasons for Cuban Trade Deficit Improvement
Most analysts agree that three positive forces are spearheading an improvement in Cuba’s trade economy.
- In prior years, Cuba imported more durable equipment and machinery that didn’t require repeat import orders in 2006 or 2007. At the same time, this equipment and machinery helped Cuba to generate more goods for export.
- Cuba continues to finance its merchandise trade deficit with revenues for Cuban services. For example, Cuba uses the services of Cuban personnel – including some 20,000 medical professionals – to partially offset required payments for imported Venezuelan oil.
- Rising prices for commodities like nickel and cobalt have helped to boost the value of Cuban exports.
Cuban Imports from the U.S.
Cuban imports from the U.S. dipped 5.8% to $347.8 million in 2006, up 238.8% since 2002.
Food categories generated the highest American exports to Cuba in 2006.
- Meat and poultry … US$59.2 million (17% of Cuban.imports, down 10% from 2005)
- Corn … $50.5 million (14.5%, down 9.5%)
- Wheat … $47.2 million (13.6%, down 6.9%)
- Rice … $41 million (11.8%, up 4.6%)
- Soybeans … $39.1 million (11.3%, up 8.3%)
- Animal feeds … $28.4 million (8.2%, up 54.4%)
- Oil seeds and food oils … $21.3 million (6.1%, down 19.1%)
- Vegetables … $19.5 million (5.6%, up 123.6%)
- Dairy products and eggs … $12.6 million (3.6%, down 58.1%)
- Unmanufactured farming supplies … $5 million (1.5%, down 12.1%)
Cuban Exports to the U.S.
American imports from Cuba are virtually nil. The only exports from Cuba in 2006 were US$144,000 worth of goods returned to the U.S. for subsequent re-import into Fidel Castro’s island.
In terms of the merchandise flow between the two countries, Cuba’s trade deficit with America was $347.6 million in 2006, up 239.2% from 2002. Cuba’s trade deficit with the U.S. increased 5.2% in 2006 – an improvement from the 8.7% deficit increase in 2005 from the year earlier.
Sources for this Article
This article presents independent calculations and insights based on data drawn from the CIA World Factbook, the U.S. Census Bureau – Foreign Trade Statistics and the National Post article ‘Cuba reports strong growth for fourth year’ (December 29, 2007) by Mark Frank.
