Hard Bargain

Havana last week angrily buzzed with bad news: the U.S. does not want to buy from Cuba in 1943 anything like the amount of sugar that Cuba expected to sell.

Right after Pearl Harbor, the U.S. Government frantically prepared to supply the United Nations with sugar on the assumption that we might be cut off from Hawaiian and even Puerto Rican supplies. Cuba promptly upped production by 15% and produced some 4,500,000 tons of sugar and molasses in 1942 and sold most of it to the U.S. at 2.65-c- a Ib. f.o.b., only a shade above the 1941 market.

Though this sugar was bought outright, the U.S. has not been able to take all of it. Shortage of shipping forced this country to reduce its normal consumption and to enforce rationing. Moreover, sugar has been taken in large quantities from Hawaii and from Puerto Rico, where some U.S. ships have to go anyway, and pampered domestic beet and cane producers turned in a record crop. Hence the U.S. carryover in Cuba now amounts to about 1,700,000 tons.

Instead of meeting a pliant Uncle Sam, Cuban sugar men have therefore smacked into a tough bargainer. The U.S. offer to Cuba last month: a 40% cut in production, last year's price, plus two measly sops in the form of 1-1 1/2-c- a Ib. for an additional 400,000-ton stock pile and vague offers to help Cuba diversify its one-crop economy (which is more than high-cost domestic producers have been persuaded to do).

Immediate result of this treatment was that the Cuban sugar delegation went home in a huff, Cuba's National Association of Sugar Growers angrily rejected the U.S. offer, and grinding on the new crop (for which Cuban growers have already gone heavily into debt) was postponed until mid-February--the latest ever. About the only hope Cuba has left is that the Good Neighbor principle will make the U.S. revise its offer.

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