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Finding our Bearings in the Stormy Seas of Cuba’s Food Market (I)

Finding our Bearings in the Stormy Seas of Cuba’s Food Market (I)
November 11, 2014

“What will happen now? Bah! Thorny negotiations and harmless shoot-outs
and, afterwards, everything will be the same, even though everything
will have changed.” (El Gatopardo, 1957)
Vicente Morín Aguado

HAVANA TIMES – Figures for Cuba’s food industry and market continue to
point upwards. The longed-for drop in prices is still nowhere to be seen
six years after the “reform” of agriculture was undertaken, when
President Raul Castro entered office.

Making sense of the jig-saw puzzle assembled over fifty years of
improvisations demands patience. We must first describe the six basic
components of Cuba’s veritable economic Frankenstein:
– The Rationed State Market (MRE): a basic quota of food products sold
at subsidized prices in Cuban pesos, a residue of the egalitarian
policies implemented decades ago. The official plan is to gradually
eliminate this market.
– The Parallel State Market (MPE): this market may be considered an
off-shoot of the MRE, where the population made most of its purchases
decades ago. The products that were removed from the MRE began to be
sold here, at market prices calculated on the basis of their informal
price. For instance, if subsidized sugar is re-sold on the black market
at 6 pesos the pound, it is reasonable to set the price at 5 pesos in
this market.
– Hard-Currency Stores Market (TRD): Prices in this market are
determined on the basis of the international average of highly-developed
countries that are sources of tourism and destinations for our massive
waves of émigrés.
– State Agricultural and Livestock Market (MAE): Its supplies come from
government companies or cooperatives. Its products are subject to price
roofs slightly lower than those of the market below.
– Supply and Demand Market (MOD): Its prices vary, depending on the
supply – demand ratio. The State exercises some control over the MOD
(for instance, these markets cannot sell wheat flour, potatoes, rice,
fish, chicken, beef or live animals).
– The Black Market (MNI): Its scope is incalculable, as is typical of a
State monopoly economy. The market encompasses all restricted and scarce
products. It finds its price references at the TRD.
Let us now have a look at how these different markets were doing at the
close of October.

MRE: A very slim range of subsidized products sold at relatively low and
fixed prices.

MPE: Fixed prices set by the State. Below are a number of examples for
readers outside Cuba (all prices quoted in Cuban pesos with a value of
around 20 to the US dollar):

Eggs: – 1.10/ U. – Dry corn flour: 2.20/ lb. – Wheat flour: 5.00/ lb. –
Salt: 5 bag. – Refined sugar: 8.00/ lb. – Imported rice: 5.00/ lb. –
Peas: 3.50/ lb. – Leg of ham (with bone, fat and skin): 30/ lb. – Leg of
pork (with bone, fat and skin): 21/ lb. – Slices of freshwater fish: 26/
kg. – Sardines: 6/ kg.

TRD: Stable prices over long periods of time, though some changes
entailed price increases:

Soybean oil: From 53.75 to 60.00/ L. – Powdered milk: From 143.75 to
165.00/ Kg. – Chicken drumsticks: From 53.75 to 60.00/ Kg. – Second-rate
minced beef: 63.75 / 500 grams. – Cuban cheeses (several brands):
123.75/ Kg. – Hake filet: 200/ kg. – Beef steaks: 213.75/ kg.

MAE: Black beans: – 14.00/ lb. – Red beans: 16.00/ lb. – Chick peas:
20.00/ lb.- Avocado: 6 to 8.00 / U. – Pineapple: 10.00/U.- Guava: 5/ lb.
– Cassava: 2.50/ lb. – Plantains: 1.50/ lb. – Corn (cob): 2/ U.

MOD: Red beans: 18.00/ lb.- Black beans: 15.00 – Chick peas: 30.00 –
Ground peanuts: 13.00 – Kidney beans: 18.00 – Guava: 4.00 – Fresh corn
flour: 7.00 – Avocado: 8 to 10.00/ U. – Bananas (less than 300 grams
each): 1/U. – Boneless pork (steak): 40 to 45.00/ lb. – Boneless leg of
ham: 50.00 – Boneless lamb: 40.00.

MNI: Anything can be found in this market. I will list a number of
high-demand items.

Coffee (115 gram package): (4/ U in the rationed market), between 10 and
15.00/ U. – Powdered whole milk (1 Kg package), sold by the State to
children up to 7 and those on medically prescribed diets at 2.50 CUP/U:
100.00/U. – Soybean oil, the State ration is of 230 grams/ person at 20
cents CUP: 50.00 / L. – Minced beef for children: 70 cents the pound in
the rationed market: 30.00/lb. – Beef: 75.00/ lb. – White cheese: 30.00/ lb.

Supply and Demand Meat Market (MOD)
Other data essential to understanding Cuba’s food market:

– According to the National Statistics Bureau, in 2013, the average
monthly salary was calculated at 471 Cuban pesos. Two decades ago, it
was approximately half that. The lowest pension is still fixed at 200 pesos.

– Remittances from abroad are another factor that cannot be neglected in
any economic analysis. Over a million Cubans live in the United States,
and tens of thousands in other countries in Europe. Last year, the
Havana Consulting Group, an independent research group based in Miami,
calculated that some 3.5 billion dollars were sent directly to Cuba from
the United States alone.

During a recent seminar sponsored by the Center for the Study of the
Cuban Economy (CEE), a professor who asked to remain anonymous told
Reuters: “I believe the majority of Cubans are realizing that much needs
to happen, and they are increasingly frustrated over the absence of
visible measures and by the negative decisions made.”

The panorama is complex. We must find our bearings in this stormy sea
and try to explain why food prices are not going down in our country.

To be continued…

Vicente Morin Aguado: morfamily@correodecuba.cu

Source: Finding our Bearings in the Stormy Seas of Cuba’s Food Market
(I) – Havana Times.org – http://www.havanatimes.org/?p=107265

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