291. Memorandum of a Telephone Conversation Between Terrance G. Leonhardy of the Office of Middle American Affairs and Joaquin Meyer of the Cuban Sugar Stabilization Institute, Washington, April 11, 1957[1]

SUBJECT

Cuban Sugar Sale to U.S.S.R.

Dr. Joaquin Meyer, representative in Washington of the Cuban Sugar Stabilization Institute, called me this morning to advise me that the Institute had approved the sale of 150,000 tons of sugar to the U.S.S.R. at 6.12 cents, delivery April to July, and a 24‑hour option on an additional 50,000 tons at 6.25 cents. He said he had advised Larry Myers of Agriculture and shared the latter's dim views of the operation.

Mr. Leonhardy voiced his surprise to Dr. Meyer at this latest sale coming on the heels of a sale of 200,000 tons to the U.S.S.R.[2] and asked Dr. Meyer if he could explain why the Institute consummated such a deal when Cuba's reserves had been exhausted and a ready market existed for sugar amongst the consuming member countries of the World Sugar Agreement. Dr. Meyer replied that he attributed the sale to three factors:

1) World prices now exceed U.S. prices, thus the pressure exerted in the Institute to sell at this time is great.

2) Cuba has undergone many lean years and there is much support in the Government for improving Cuban dollar exchange balance while the opportunity exists.

3) Because of the political instability in Cuba sugar producers are anxious to get rid of existing supplies and the U.S.S.R. was willing to place a large firm order while consuming countries in the Agreement were limiting purchases to smaller quantities.

Dr. Meyer mentioned that Larry Myers of Agriculture had expressed his concern that Cuba now might find it difficult to fill its U.S. quota and that cognizance would be taken of this when our present sugar legislation is amended. Dr. Meyer said he believed that despite the pessimistic reports on Cuba's sugar production thus far in the grinding season, he had indications that the production quota of 5,150,000 long tons would be exceeded. If the production does not exceed the established quota, Dr. Meyer pointed out that the sale to the U.S.S.R. could come out of the 350,000 long tons established as the "financed reserve" within the production quota.

[1] Source: Department of State, ARA Files: Lot 59 D 2, Cuba: Sugar, 1957. Official Use Only.

[2] This sale is discussed by Callanan in a memorandum of March 1, ibid. The Cubans also sold sugar to Russia in the spring of 1955. Further documentation is ibid., Central File 837.235; ibid., MID Files: Lot 57 D 59, Sugar, Jan.‑May 1955; and ibid., ARA Files: Lot 59 D 376, Cuba, 1957.