Cuba, the world's eighth largest sugar producer, is in talks to buy sugar from the United States for its domestic market, the president of the Cuban food import agency Alimport, Pedro Alvarez, said on Wednesday.

Cuba's sugar output has declined dramatically in recent years, forcing the closure of half its unproductive mills last year. The communist-run government has had to import sugar from Brazil for local consumption because much of its production is under contract for export.

"There is a U.S. company interested in selling us sugar and we are interested in buying," Alvarez told Reuters. He hoped a deal could be struck during this week's trade fair in Havana.

Talks are focusing on U.S. export quota availability, a business source said.

"For our part, there are no objections. If American producers want to sell us sugar and the price is good, why can't we buy it," Alvarez said.

"The United States is close. It is a country of friends. We want to buy sugar. It would be historic," he added.

Cuba was the world's largest sugar producer until Brazil Outstripped it in the first half of the 20th Century. Most of the Cuban output was destined for the United States. U.S. companies owned many sugar mills on the island until they were confiscated after the 1959 revolution led by President Fidel Castro.

U.S. food sales to Cuba are allowed under an exception enacted three years ago to the four-decade-old trade embargo. Over 70 American companies are attending the Havana trade fair.

Copyright 2003 Reuters Limited.