837.5017/26
The Ambassador in Cuba (Braden) to the Secretary of State
[Received February 19.]
Sir: I have the honor to report in connection with the present sugar negotiations,25 that the Director of the Cuban Office of Price Regulation and Supply26 states confidentially, that Cuba may be forced to raise its ceiling prices on certain vital food products such as rice, bread, and lard, as a result of the increased c. i. f. Habana prices on imports from the United States. He states that the increased prices in the United States during December to February and the present shipping costs, will make necessary an increase in retail prices.
Furthermore, it is feared that an increase in Cuba’s ceiling prices on these most essential food products, if made immediately after the [Page 212] Cuban Government has promised to maintain its existing prices, might endanger Cuba’s entire program of price control.
It is stated that prices for rice, wheat flour, and lard, in the United States have advanced considerably during 1942 and therefore the United States guarantee not to increase prices above the level during the highest month will not result in any relief to Cuba’s present situation because Cuba based its ceiling prices on costs which prevailed earlier in the year.
[Here follow tables of monthly prices c. i. f. Habana for wheat flour, lard, and rice as reported by the ORPA.27]
It is stated that in the case of some exports to Cuba, the United States ceilings have been too flexible to be effective in preventing price increases and that in some cases the present prices offered to Cuba appear to be above the ceilings.
The Cuban Office of Price Regulation and Supply states that the only way in which Cuba can maintain its present price ceilings is to obtain a reduction in (a) United States prices, or (b) in shipping charges. Consequently, it has asked that the United States Government Agencies bear this matter in mind in connection with the commitments made in the present sugar negotiations. Furthermore, ORPA has requested the Embassy to transmit to the War Shipping Administration a request for a reduction in the ocean freight rates from Florida ports to Habana. These rates are now approximately as follows:
| Lard | 74.4 cents per 100 pounds |
| Flour | 60.6 cents per 100 pounds |
| Rice | 50.5 cents per 100 pounds |
These rates from Florida are the same as those for the much longer haul from Gulf ports or North Atlantic ports.
The Embassy has discussed this matter with the Habana representative of the War Shipping Administration and feels that a reduction in the rates from Florida ports to Habana should be made, if possible, especially in the case of these three important basic food commodities.
Respectfully yours,