Created: 11/1/1967

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Intelligence Report

Cuban Sugar Production7 and Prospects80


Copy No.



CENTRAL INTELLIGENCE AGENCY Directorate of Intelligence


Cuba;'. Sug.ir_ Production 7 and ProspectsT0


The growth in production of Cuban sugar continues to be slow and erratic. Sugar output has fluctuatedesult of the weather and has been held down by organizational shortcomings and the loss of harvest workers to other occupations. Production7illionlthough far below planned goals, was the largest crop Production inB will decline because of dry weather, and the crop probably will beillion tons. Plans0 call forillion tons of sugar, but production will probably rise to no moreillionillion tons because of limitations in harvesting and milling capacity.

A cropillion tonsith some growth in nonsugar exports, could raise Cuba's total export earnings nearlyercent but would not resultomparable rise in import capacity, because Soviet credits arc expected to decline. Credits from Free World sources also are likely to decline9 The OSSR, however, probably will import larger quantities of Cuban sugar and will continue to pay prices far above world market levels. The net reduction in total Soviet economic assistance, consequently, will be small because of rising sugar subsidy payments.

* All tonnages are in metric tons.

Note.:. This report was produced by CIA. It waa prepared by the Office of Economic Research and 'coordinated uith the Office of Current Intelligence. The estimates and conclusions represent the best judgment of the Directorate of Intelligence ae of November

1. The Cuban sugarillion tons, nearlyercent larger than the drought-ridden crop6 but only slightly more than5 crop (see The sharp recovery in production was the resultery favorable growingecord application of fertilizer,ong harvesting season. 7 harvestxceeded only by the cropsillion tons2illion tonsfell far short of the official goalillion tons, but probably was well within the range expected orivately by most Cuban officials.

Table 1

2. One of the most notable features of7 crop was the" length of the harvest season, the longest in Cuban history. Traditionally, harvesting does not begin until mid-January because of the low sucrose content of the cane prior to this time, and it rarely extends beyond June, when the rainy season normally stops harvesting work. Cutting of7 crop, however, began at the end of6 and,ew areas, continued

Cuba: Sugar6 7



5 3

into mid-Julyesult of below-nornalhe early start of the harvest season was an effort to compensate for Cuba's failure to increaseits harvesting capacity in the past two years. At the peak of7 season, the daily harvesting rate was only slightly higher than during the same period Even with the exceptionally long harvest seasonercent of the cane harvested was cut in November and Decemberercent was cut in Julylessillion hectares of sugarcane probably were cut, out of total plantings available for harvest ofillion hectares. Had the entire crop been harvested, production would have beenillion tons.

Prospects for 8 Harvest

volume of sugarcane availableill decline because of anotherand sugar production probablyillion tons. Rainfall was aboutbelow normal during the first nine months

he main part of the growing season for8 crop. Moreover, the drought was most severe in the eastern half of the island, the principal cane-producing area.

capacity will be increasedbecause of more extensive use of machinery

to cut and handle theaddition,

the harvest season again willbecause

cutting began in earlyaahead

* Yields suffered during the early part of the harvest because of the lower sucrose content of the cane. For the month of December, milling yields averagedercent, compared with yields 1 percent for the 7 harvest hole.

8. 7 harvest alsoarge scale, of an innovation known"as the cane collection center (centra de Utopia). The collection centertationary 'machine placed at rail loading points where the -cane is txansferred from field vehicles to rail -cars for ^shipment tohe mills (aboutercent.-of all cane is* transported by rail to the mills), ^ese..machines receive he cane with only theclean the cane of leaves and straw, cut^ithort pieces, and load it onto .rail .cars. ^Theane collection centers ^employedarvest did not meet their production norms probably because of inexperience in organizing the work of tho canters and because of transportation problems but theyignificant contri-bution. The labor force.assigned to^the"collection centers in7 harvest_was_,expected(>c6 5 percent moreIts actualercent toercent greater than^^atof "other'workers. t


plans call0 cbliection^carifecrs to be in operation, forL3arvest'.'^abor forco of0 would be" isYociated ffiknthis number o( collection -canters,"including" caneransportation workers, and workers assigned to the operation of the centers. If tho original, production norms are methich aoems' probable as more experience is gained,enters could harvest sufficient cane forillion tons of sugar. The remainder jafbor force, at its present level ofould produceillion tons of sugar-for'a to'tal harvestillion tons.

10. The productivity of the harvest.labor forceholeowever, should be greater because of higher yields of.caneesult of increased fertilization. As shown in the following tabulation, fertilizer supplies for all agriculture

1L'lL On-

uses have risen sharply in recent years and further increases are planned0 . (About half of -all fertilizer used is applied to sugarcane.)



. -.





These additional factors, along with more extensive cutting early in the season, probably will increase the total harvest capacity in0 toillionillion tons. Investments now being undertaken in transportation, moreover, should prove adequate torop of this size to the "mills.

. ^Milling capacity also limits Cuba's ability to produceillion tons of sugar in" Existing mills in their present state of repair could haveropillion tons in7 had sufficient cane been available. Tentative plans to construct new mills are not far enough advanced to add to present capacityrogram now under way to modernize and expand existing mills will provide additional grinding capacity.This program, along with the more intensive use of mills early in the harvest season, should bring total milling capacity easily within the range of the harvest capacity estimated

Implications for Sugar Exports0

f Cubaillion tons of sugart willillion tons available for export, comparedillionhe bulk of such an increase probably would go to the USSR (see Under the terms of an agreement signed inuba is scheduled toillion tons of sugar annually to the

value of Cuban exportsercent7 (see This estimate" assumes that Communist countries, with minor exceptionsr--will continue toents per poundisVJ-for'Cuban sugar as they have sinceand' that'pree. World sugar prices will improve 'somewhat "from 'their depressed levels6ir.L

'tiJno--vover; idarziable'as

""Cuba: -Value 7H

.lb to

illion US S


. .; 0




World countries


exports .

This estimate assumes an average priceents per pound in Free World markets If, however, the price stays at the same level as7 ents per pound), the value of these exaorts would beillion.

he projected rise in Cuban export earnings0 will not resul-omparable_increase in import capacity, because drawings on foreign credits to finance trade imbalances probably will fall off. The USSR, Cuba's largest creditor, apparently wants to reduce its direct balance-of-payments support as

5 i* '

Cuba's ability-to. export .increases.* Consequently, most of the.'increaseuba's oxport earnings from the USSR will be. used tp. replace. this support. The net reduction total Soviet economic assistance, however, probably, small because of rising sugar subsidy paymentsTha use of credits from non-Ccnmunist sources also can bo expected to decline9 Cuba's indebtedness to Free World suppliers and banks has risen sharply in the past two years. An increaseillion is expectedbringing Cuba's Free World indebtedness,otal of0 million. This rate of debt accumulation cannot be maintained, and Cubad to reduce or eliminate its trade deficit" with-free WorYd "countries over the next several years in order to stabilize its debt position.



r . .r;. } Cuba motived about1 billion in economic*creditsand grants and aomm 0 million in eugap' eubeidyrom th* USSR. The Soviet sugar eubeidy to,Cuba7 ie estimated5 liillion. Cuba's annual trade defiait with the USSR hae rangedow5 millionSigh5 million in

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