THE CUBAN CITRUS INDUSTRY Presentation to the 2018 International Citrus and Beverage Conference Clearwater, Florida, September 19, 2018 by William A. Messina, Jr. and Ariel Singerman, UF/IFAS Food and Resource Economics Department and CREC Lake Alfred.
CUBA IS A LARGE ISLAND! HAVANA 90 MILES NUEVITAS ISLE OF YOUTH (ISLE OF PINES) JAGUEY GRANDE GUANTANAMO
A LONG HISTORY OF CITRUS IN CUBA Citrus seeds from the Canary Islands were brought to Haiti during Christopher Columbus second voyage in 1493 Citrus was introduced from there to Cuba and then to Mexico and Central America. Through the 1800s, citrus spread throughout the island mostly in patios of country homes shade for coffee growing very limited commercial plantings.
EARLY 20 th CENTURY TWO IMPORTANT INFLUENCES 1. Freezes in Florida in 1890s 2. In the late 1890s, Spanish-American War (< 4 mo.), Cuba-Spanish-American War (> 4 years) U.S. tried to exert its influence in Cuba. Early 1900s the Cuban Land and Steamship Company began promoting land sales in Cuba for the establishment of American colonies in Cuba 2½ to 40 acre plantation plots homes and business plots
CUBAN LAND & STEAMSHIP CO. Launched by some of the most successful and shrewdest business men of New York... A colony for Americans only, in one of the choicest, most beautiful and fertile spots on the most fertile island in the world. real estate experts are in Cuba buying choice [agricultural] land with the sole object of making all of this land worth fifty times its present value. the most gigantic and liberal colonization enterprise in the history of the world.!
EARLY 20 th CENTURY 1900 a ship arrived in Nuevitas (in eastern Cuba) with more than 200 Americans who were preparing to establish the first American colony in Cuba they arrived to undeveloped mangrove swamps By 1903 37 American colonies in Cuba By 1913 64 colonies in Cuba In 1920s approximately 80 foreign colonies, mostly American but also included English, Canadian, Scandinavian & German settlers. Most in eastern Cuba and the Isle of Pines (now the Isle of Youth) off of Cuba s southwestern coast
EARLY 20 th CENTURY (continued) Colonies produced vegetables and citrus In 1905 Cuba began to export citrus to the United States, particularly grapefruit. Cuban grapefruit exports to the U.S. peaked in 1922 at about 520,000 boxes. On the Isle of Pines (today Isle of Youth) settlers from the United States had developed: extensive grapefruit plantings and related facilities; two modern packing houses.
LATE 20 th CENTURY Cuban Revolution in 1959 brought about expropriation of large and medium sized farms and consolidation into immense State Farms, but this had relatively little impact on citrus acreage or production levels. Lykes-Pasco had extensive groves and facilities on the Isle of Youth that were expropriated in the early 1960s. 1968 National Citrus Program launched by the Cuban government (with Soviet investment) and a target market of the Soviet Union and Eastern Europe. Fruit consumption in Soviet Union and Eastern Europe was low and Soviets offered high prices for Cuban citrus.
CUBAN GRAPEFRUIT HARVEST - 2007
CUBAN GROVES (early 2000s)
JUICE PROCESSING PLANT AT JAGUEY GRANDE
GROVES AT JAGUEY (early 2000s)
GROVES AND HARVESTING (pre-hlb)
POST- HURRICANE http://www.radio26.cu/2017/09/17/en-el-suelo-pero-convida/
CUBAN CITRUS PRODUCTION Peak In 1990 Cuba was the third largest grapefruit producer in the world after the U.S. and Israel
CUBAN CITRUS PRODUCTION Soviet Union collapse
CUBAN CITRUS PRODUCTION Israeli investment
CUBAN CITRUS PRODUCTION Hurricanes
MORE TYPICAL HURRICANE PATH 2008 HURRICANES HURRICANE IKE
CUBAN CITRUS PRODUCTION Smaller recovery in 2009
CUBAN CITRUS PRODUCTION HLB spreads and soon after Israeli investment departs
CUBAN CITRUS PRODUCTION DECLINES, 1990 TO 2017 - BOXES, METRIC TONS & % BOXES METRIC TONS 1990 2017 1990 2017 % Decline 1990 to 2017 Oranges 14,743,016 748,402 601,854 30,552 94.9% Grapefruit 8,640,760 1,097,923 333,157 42,332 87.3% Lime 1,497,440 236,142 61,130 9,533 84.4% TOTAL CITRUS 25,354,054 2,474,118 1,015,873 98,761 90.2%
Red Grapefruit White Grapefruit Early Oranges Valencia Dancy Eureka Lemon CUBA S CITRUS HARVEST SCHEDULE Au Se Oc No De Ja Fe Ma Ap My Ju Jly Source: MINAG * = small production volumes Persian Lime * * * * * * * *
CURRENT SITUATION Cuba continues to seek low-tech, low-cost ways to address HLB. They continue to replant trees. They continue to seek foreign investment in citrus. But they also continue to convert land from citrus.
Depend on: FUTURE PROSPECTS? Ability to develop ways to deal with HLB? CAPITAL investment. (They have LAND and they have LABOR... ) Very limited ability to generate domestic sources of capital and limited lending channels Foreign investment is key!
FOREIGN CAPITAL Some very successful foreign investments in Cuba, typically as a joint venture with the Cuban government as majority partner: Tourist hotels Meliá Hotels (Spanish) Sheraton Mining (nickel) Sherritt International (Canadian)
FOREIGN INVESTMENT in AGRICULTURE Largely limited to export crops (because of limited effective domestic demand) Citrus most foreign participation in production is gone Shellfish Rum Cigars Greenhouse vegetables (unsuccessful) Sugar (recent)
IMPORTANCE OF CAPITAL $2 to $2.5 BILLION per year in foreign investment needed to achieve goals for economic growth! Foreign investment laws are evolving but are not yet up to international standards. Cuban government is promoting foreign investment. Opportunities for investment of $180 million in citrus production and processing
CUBAN INVESTMENT OPPORTUNITIES IN CITRUS $152 million partnership to develop 14,600 acres of citrus over the next 5 years for fresh and processed markets. $15 million joint venture for processing of concentrate, single strength juices, pulp and essential oils. $7 million joint venture to develop 7,000 acres of citrus and 700 acres of tropical fruit trees, and a plant for processing juice, pulp and preserves. $5 million partnership to develop processing for juice, concentrate and essential oils with organic certification.
FUTURE PROSPECTS? Cuba could be a niche player in certain citrus markets. They have organic certification for export to EU. Oranges are very sweet (25+ ratio). A role for early season grapefruit? Essential oils? Could become an important tropical fruit supplier? But requires investment. Until such time as Cuba has access to the U.S. market, prospects for significant FDI would appear to be limited.
THANK YOU! Bill Messina University of Florida/IFAS Food and Resource Economics Dept. Email: wamess@ufl.edu Voice: 352 294-7656