US company signs food deal with Cuba

Hurricane Michelle destroyed thousands of homes

An American agribusiness company, Cargill, says it has signed an agreement to sell food to Cuba in the wake of the island's worst hurricane in more than 50 years.

The deal - which is still subject to US Government approval - would be unprecedented in four decades of hostile relations between Cuba and the US, who have no formal diplomatic ties.

At least two other American companies are believed to be negotiating similar deals with the authorities in Havana.

Cargill Inc, which is based in Minneapolis, said in a statement the first shipments of 44,000 tonnes of corn, wheat, and soybean oil were expected to arrive in Havana in January next year.

Castro: Ready to buy but wants an end to sanctions

Cuba - subject to a US embargo for 40 years - had proposed to buy food and medicine from the US in the wake of Hurricane Michelle, which caused massive damage across the island earlier this month.

President Fidel Castro said last week Cuba was ready, "just for this once, to acquire certain quantities of food and medicine from the United States, paying them in cash".

Under US law, the transactions must be made in cash, the president of the US-Cuba trade and economic council John Kavulich told the BBC's World Business Report.

"Cuba is making these purchases under current US legal conditions," he said.

Concessions

He said the goods could be transported on American vessels, reversing a previous insistence that the shipment be picked up and carried on Cuban boats - a condition rejected by Washington.

Clean-up operations are continuing after the worst storm in living memory

The Cuban president has insisted that Havana would not buy any other goods from the US while the embargo remained in place.

He also declined an offer of humanitarian aid from Washington.

The Cuban authorities are still struggling to clean up after Hurricane Michelle, which battered the island with gusts of up to 200km/h (125mph).

It caused extensive damage to the island's electricity infrastructure, ruined crops and left many communities unreachable by car or telephone.

The US Congress approved food exports to Cuba last year, easing the embargo imposed in 1961.

But the legislation does not permit US financing of such transactions, nor allow the purchase of foods and medicines from Cuba.