HAVANA, Cuba -- The Cuban government has agreed to purchase 100,000 metric tons of U.S. rough rice and 30,000 metric tons of milled rice. The rough rice is slated for delivery in September, October and November and the milled rice in January, 2006.

The sales were announced by Pedro Alvarez, chairman and chief executive office of ALIMPORT, the Cuban government agency that handles sales and purchases of agricultural products, and came during a press conference at noon today with members of a USA Rice Federation delegation visiting Havana.

“The contracts will be finalized in the next few days,” said Alvarez. ¨With these purchases, our imports of U.S. rice will exceed those of last year.” (U.S. shippers have sold 90,000 metric tons of rice to Cuba so far this year, according to officials with the USA Rice Federation. Last year´s sales totaled 200,000 metric tons.”

USA Rice Federation Chairman Lee Adams thanked Alvarez for the purchases and for ALIMPORT’s “continued willingness to work with U.S. rice. We appreciate not just these sales but the continued friendship and cooperation we are enjoying with the Cuban government.”

“The timing may be as important as the amount,” said USA Rice President Stuart Proctor. “This may give a lot of producers a chance to empty their bins before they begin the new harvest.”

The sale could be worth as much as $25 million to the U.S. rice industry.

USA Rice Federation leaders had not given up on making new sales on the trip but were discouraged because of the negative tone taken by Alvarez during discussions on Thursday. Alvarez said the Cuban government was disappointed at what it saw as a lack of industry response to try to overturn new rules increasing the restrictions on trade between the United States and Cuba.

But, speaking during a five-hour meeting at the presidential offices Thursday night, Cuban President Fidel Castro told the delegation that Cuba would buy 100,000 metric tons of paddy rice and 30,000 tons of milled rice for now with the possibility of more purchases in the future.

"We welcome the statements the delegation made yesterday about its efforts to mormalize trade regulations and travel between our two countries,” Alvarez said at today´s press conference. ¨We said yesterday that shipments from the United States had dropped 50 percent because of the new restrictions. These restrictions penalized the U.S. rice farmer more than the Cuban government.

“Because of this, we believe the U.S. rice business stands a chance of getting a much greater share of the Cuban rice market in the future.”

Alvarez was referring to regulations issued by the U.S. Treasury Department´s Office of Foreign Assets Control that required Cuba to pay for shipments of U.S. products before they left ports in the United States. Because the U.S. has not banking relationships with Cuba, the rules made a complicated process even more difficult for the Cuban government which has been paying cash for all shipments of U.S. commodities.

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