by William A. Messina, Jr. and Ariel Singerman,
UF/IFAS Food and Resource Economics Department
and CREC Lake Alfred.
THE CUBAN CITRUS
INDUSTRY
Presentation to the
2018 International Citrus and Beverage Conference
Clearwater, Florida, September 19, 2018
CUBA IS A LARGE ISLAND!
90 MILESHAVANA
NUEVITAS
GUANTANAMO
ISLE OF YOUTH
(ISLE OF PINES)
JAGUEY
GRANDE
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 20th 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 20th 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
• 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.
EARLY 20th CENTURY (continued)
• 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.
LATE 20th CENTURY
CUBAN GRAPEFRUIT HARVEST - 2007
CUBAN GROVES (early 2000s)
JUICE
PROCESSING
PLANT AT
JAGUEY GRANDE
GROVES AT
JAGUEY (early 2000s)
GROVES AND
HARVESTING(pre-HLB)
http://www.radio26.cu/2017/09/17/en-el-suelo-pero-con-vida/
POST-
HURRICANE
CUBAN CITRUS PRODUCTIONPeak In 1990 Cuba was the
third largest grapefruit
producer in the world
after the U.S. and Israel
CUBAN CITRUS PRODUCTIONSoviet Union collapse
CUBAN CITRUS PRODUCTIONIsraeli investment
CUBAN CITRUS PRODUCTION
Hurricanes
2008 HURRICANESMORE TYPICAL
HURRICANE PATH
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
CITRUS25,354,054 2,474,118 1,015,873 98,761 90.2%
CUBA’S CITRUS HARVEST SCHEDULE
Au Se Oc No De Ja Fe Ma Ap My Ju Jly
Red
Grapefruit
White
Grapefruit
Early
Oranges
Valencia
Dancy
Eureka
Lemon
Persian
Lime * * * * * * * *
Source: MINAG
* = small production
volumes
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.
FUTURE PROSPECTS?
Depend on:
• 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: [email protected]
Voice: 352 294-7656