Belarus to Export Sugar to Cuba

UNCLAS MINSK 000456 SIPDIS (C O R R E C T E D COPY (TAG AND SLUG LINE ADDED) SIPDIS STATE PASS USDA E.O. 12958: N/A TAGS: ECON ETRD PREL USTR EAGR CU BO SUBJECT: Belarus to Export Sugar to Cuba ¶1. Belarusian Prime Minister Sergey Sidorsky led a delegation of GOB officials and state-owned businesses to Cuba April 20 to 23. In addition to the usual exhortations of fraternal socialist comradeship, in a deal only possible between two command economies Belarus agreed to import 100,000 tons of raw Cuban sugar this year, process it in Belarus' four state-owned sugar refineries, and send the sugar back to Cuba. In other deals the Minsk Automobile Plant (MAZ) will sell to Cuba six cranes, worth Euro 470,000, Minsk Tractor Works (MTZ) will sell 100 MTZ-80 agricultural tractors, and other Belarusian companies wi,l supply dried milk, butter, more sugar, fabric and clothes. Sidorsky also announced that Belarus hopes to use Cuba as a middleman for supplying potassium fertilizers to other Latin American countries. [Note: Belarus already sells large amounts of potash to several Latin American countries, particularly Brazil.] ¶2. In 2005, trade between Belarus and Cuba fell 44.9% from the year before to USD 20.3 million. Belarusian exports to Cuba nearly dgubled to USD 13.2 million, mostly trucks and tractors, while Cuban exports fell 76.3%, mainly because sugar exports to Belarus fell four times from 2004 levels. Russia Pressing Belarus on Sugar Exports -------------- ¶3. Separately, under union state agreements, Belarus can export beet sugar to Russia duty free, but must pay USD 340/ton on exports of cane sugar (Belarus has no sugar cane fields, but imports sugar from Cuba and Brazil). In 2005 Russia's Union of Sugar Producers (RUSP) convinced the GOR to launch an investigation into Belarusian sugar exports. RUSP argued that Belarus was exporting large amounts of cane sugar to Russia, but labeling it as beet sugar to avoid tariffs. According to press accounts, as of August 1, 2005, Belarus had exported 395,000 tons of "beet" sugar to Russia. This sugar sells in Russia for 10% less than does Russian-produced sugar. However, from January-September 2005, Belarus' four sugar refineries (all state-owned) had produced 464,100 tons of cane sugar but only 87,400 tons of beet sugar. While the GOR's investigation continues, in November Russia's Ministry of Justice ordered that Belarusian sugar could only be imported to the Troekurovsky customs station in Moscow. Minsk retaliated by placing a similar condition on imports of televisions produced in Kaliningrad. KROL