837.61351/12–2145: Circular telegram
The Acting Secretary of State to the Diplomatic Representatives in the American Republics
Negotiations for the purchase of Cuba’s 1946 sugar crop have again been broken off at the instance of the Cuban delegation, which states [Page 954] that it will require acceptable assurances regarding the future of Cuban sugar in the United States market before it is prepared to consider a global sale.
The Department had hoped that essential deficit requirements of other American Republics could be provided for by agreement with Cuba to set aside sugar for sale within the hemisphere at a reasonable price, as was done last year. Cuban negotiators were not receptive to our request that sales to other countries be deferred until after conclusion of a contract with the United States, and have, on the contrary, indicated that they will be obliged to meet pressing requirements of other countries and that they expect to charge prevailing world price. The nearest approach to a world price under present controlled market conditions is that charged for Peruvian sugar, which has recently been in the neighborhood of 11 cents per pound, refined basis.
The Department pointed out that the present world price is exorbitant and that exaction of this price will seriously impair the efforts of the other American Republics to prevent an inflationary rise in the cost of living. The Cuban representatives indicated that failure of the other American Republics to control the prices of commodities exported to Cuba provide adequate justification, in their view, for the action contemplated by Cuba. It would, therefore, appear that, even if the United States is later successful in concluding a contract at a price below the going world price, it is extremely doubtful that Cuba will agree to sales at a comparable figure elsewhere in the hemisphere since, so far as the Department is aware, the United States is the only country which has exercised close control over export prices.