Office of the Historian

334. Memorandum From the Assistant Secretary of State for Inter-American Affairs (Martin) to Acting Secretary of State Ball0

Washington, May 3, 1963.

SUBJECT

  • Sugar

I have been requested to comment on a suggestion made at the meeting of the Standing Group on April 301 that we try to figure out some way to diminish the Cuban income from the sale of sugar. It was particularly noted that the present high prices and tight market have prevented Cuba from suffering the losses which would normally be expected from the sharp fall off in her production.

[Page 801]

I attach an INR memorandum,2 a copy of which has already been sent to Mr. Bundy, on the sugar situation.

From this memorandum and discussions with sugar experts I am convinced of several things:

1.
The present high prices and tight market represent a real shortage of sugar in the world.
2.
The Soviet Union is not holding sugar off the market—Cuban or otherwise. In fact there is some evidence that satellites are exporting more than usual. Therefore the high price is not the result of Soviet rigging of the market.
3.
To keep United States prices down the Department of Agriculture is doing everything it can to increase supplies of sugar in the world and for the United States in the foreseeable future.
4.
Even with a good beet crop in Europe this year and a good cane crop in early 1965, the sugar situation will still not return to the surplus and low price condition of a year ago. It will take until the end of 1964 with another beet crop but more probably into 1965 before there is any material change in the situation.

I conclude from this that there is no feasible way in which the Cubans can be deprived of the prices they are now getting for their sugar or of free world markets for a year and a half and possibly two years. I therefore suggest that this idea be shelved for at least a year.

  1. Source: Kennedy Library, National Security Files, Countries Series, Cuba, General, 5/1-5/15/63. Top Secret.↩
  2. See Document 330.↩
  3. Memorandum from Hughes to Rusk, RES-15, April 19. (Department of State, ARA/CCA Files: Lot 66 D 50, Cuba-Standing Group) See the Supplement.↩