An Expert Denies the Effects of the International Price of Wheat on Bread in Cuba

Wheat flour imported from the José Antonio Echeverría mill. (Empresa Cubana de Molinería)

14ymedio bigger14ymedio, Madrid, December 13, 2023 — The quantity and quality of the bodega (ration store) bread has been at the center of conversations, the official press and the independent media of Cuba for months. Several provinces have recognized in the last year that they are producing less or less weight, and every ship that arrived loaded with wheat “from Europe,” which, despite the tonnage, barely lasted for a few days, has been announced with great fanfare.

The reason given by the authorities has always been the same: the war between Russia and Ukraine has made imports more expensive, but this justification will have to be better explained, since the price of wheat has fallen in international markets. According to the Cuban economist Pedro Monreal, “during 2023, the price of wheat in the international market has had an oscillating trajectory with a marked downward trend. The problem with the diminishing ’weight of the bread roll’ supplied to Cubans through the rationing system should be explained in another way. It is not due to an increase in the international price of wheat.”

The problem with the “weight of the bread roll” should be explained in another way. It is not due to an increase in the international price of wheat

The expert responded in this way to the words of Víctor Díaz Acosta, director of the Provincial Food Industry Company in Sancti Spíritus, who last week gave an interview to the official newspaper of the province, Escambray, in which he stated that the price of the raw material had tripled.

“Today Cuba buys wheat to process because it is cheaper, despite the fact that before Covid and the war between Russia and Ukraine, a shipment of this grain, which provided flour for about 12 days of national production, was purchased for 4 or 5 million pesos, while today it is around 13 million,” he said after talking about the State subsidy for the product.

“It could be that the price of wheat has tripled, but it would be a misinterpretation because the international price of wheat has fallen,” says Monreal. The economist manages the data from the Business Insider website that placed the price of grain at $234.92 per ton that day (December 8), its lowest level since September 28, 2020, when it was $239.50 per ton.

“Since the maximum reached on March 7, 2022 (446.65 dollars per ton), shortly after the start of the war in Ukraine, the international price has fallen by 47.4% up to today,” the expert continues, adding that the price increase remained for approximately one year. “It is not a question of how much was acquired before and now there’s ’a boatload’ of wheat,” emphasizes Monreal, who believes the Government should focus on giving explanations, in any case, about transport costs.

Among the answers, there are those who mention the possibility that it’s a matter of “poorly negotiated” freight expenses, which is raising prices three times higher than in 2020.

Monreal also has a debate with another user who reproaches him for not taking into account the embargo. “Although today the price of wheat may be at its lowest value, the wheat that is consumed today is at the price of at least 3 months ago. The only way to have wheat with today’s price would be to buy it in the United States, and that is difficult,” he says. Monreal replies that the product is bought from a neighboring country. In addition, he adds, “the price of wheat in the international market has fallen throughout 2023. The question is not the price of wheat ’today’ but that it is getting cheaper.”

His challenger, identified as William SC, replies that there is no currency for everything Cuba needs to buy and admits that the justifications end when Díaz-Canel makes one of his international tours. “Right there all the justifications disappear. The main cause of the quality of bread is one thing: the malfunction of the socialist state enterprise,” he says.

Right there, all the justifications disappear. The main cause of the quality of bread is one thing: the malfunction of the socialist state enterprise   

Monreal agrees on both things. “That’s what I said. To have foreign currency you have to export, and to have credit you have to have a credit rating. The “bag” of currency does not fall from the sky. It must be created with an internationally competitive economy that generates foreign exchange and saves on imports,” he argues. As far as purchasing capacity is concerned, he adds one more cause. “Apart from the business functioning and decapitalization of the Cuban industry, there is a high balance-of-payments deficit and high foreign debt service that reflect a serious problem of Cuba’s international insertion. This is not resolved with ’high-level’ visits.

The last time the authorities mentioned the arrival of a boat of wheat on the Island was in October. A similar event had not occurred since July, as they themselves acknowledged. With those 23,500 tons “from Europe,” 16,000 tons of flour can be produced, which in turn, according to 14ymedio, will provide 20 days of bread.

According to Víctor Díaz Acosta, the Sancti Spíritus company received 42 tons a month in other times, of which 28.4 went to the regulated bread and the rest to other products; currently everything has to go to bread. “This province was the first to sell something other than the bread of the regulated family basket in a bakery, but we reiterate that Alimentaria has not renounced its main social purpose: to produce bread for the bodega,” he added.

Translated by Regina Anavy


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