Saudi Arabia has nearly doubled purchased of U.S. corn this marketing year due to a combination of favorable government policy shifts, competitive prices and market development work by the U.S. Grains Council (USGC).
A recent sale of U.S. distiller’s dried grains with solubles (DDGS) to Saudi Arabia is an example of an increasingly diverse number of markets interested in the feed product and the impact of sustained market development in areas showing potential for long-term growth.
Last month, Saudi buyers purchased 18,000 metric tons of U.S. DDGS, a relatively large amount and a dramatic increase from total sales of just 8,400 metric tons in 2014.
By: Cary Sifferath, Senior Director of Global Programs, U.S. Grains Council
The U.S. Grains Council (USGC) recently hosted in the U.S. Midwest a trade team from Saudi Arabia made up of feed grain importers and end-users. During their travels, members of the team learned how U.S. corn and distiller’s dried grains with solubles (DDGS) are produced and sold worldwide, which is part of an effort to regain and maintain U.S. market share of Saudi grain imports.
Well into the 2014/2015 marketing year, customers are still finding strong value in purchasing from the United States as a high-quality and competitively-priced crop attracts attention around the globe, including in the Middle East and North Africa (MENA) region.
The MENA region has seen strong sales and shipments of U.S. corn to key U.S. Grains Council (USGC) contacts and major corn importers and end-users in the region this year.
By: Cary Sifferath, Regional Director for Middle East and Africa, U.S. Grains Council
My 21 years of work with the U.S. Grains Council (USGC) has taken me many places and into many unusual situations. Two weeks ago, an otherwise ordinary trade servicing visit planned to the Kingdom of Saudi Arabia took one of those unexpected turns when it was announced just hours before I boarded my flight that King Abdullah - the world’s oldest ruling monarch who oversaw a country that controls 16 percent of the world’s known oil reserves – had died.
By: Cary Sifferath, U.S. Grains Council Regional Director of the Middle East and Africa
In August 2011, the U.S. Grains Council successfully achieved the inclusion of distiller's dried grains with solubles (DDGS), corn gluten feed (CGF) and other U.S. commodities on the Saudi Arabian import subsidy list. Inclusion on this import subsidy list is essential in eliciting interest from Saudi importers of these products. This success has had a real impact: as of Aug. 14, a few weeks from the end of the current marketing year, Saudi Arabia had imported 2.75 times more U.S. corn than over the same time period in the 2012/2013 marketing year.
The Almarai Company, Saudi Arabia’s largest dairy company and third largest poultry company, has announced plans to stop domestic cultivation of forage and rely entirely on imported feed. This move is in response to anticipated new governmental restrictions on water usage, as the country’s economic and population growth continues to overtax available water resources.
“Almarai has been a strong and consistent purchaser of U.S. corn, often paying a premium for U.S. origin corn,” said Cary Sifferath, U.S. Grains Council regional director of the Middle East and Africa. “The company already imports 100 percent of its feed grain needs for milk production."
- Corn market size estimated at 3.6 MMT. Insignificant local crop.
- #1 barley importer in the world with 8 MMT.
- 487 TMT import of corn co-products.
- Quality market but also sensitive to price.
- Population: 32.1 million
- Population growth: 1.96%
- Urban %: 78.9%
- Urban growth: 2.5%
- GDP: $1.68 trillion
- GDP growth: 3.6%
- GDP per capita: $52,183
- Oil-based economy with strong government controls over major economic activities.
Things are looking up for U.S. corn exports to the Middle East and North Africa region.
"With U.S. corn priced competitively again, U.S. market share in the Middle East and North Africa region has potential to expand," said Cary Sifferath, U.S. Grains Council regional director in the Middle East and Africa. "The region is already seeing an increase in U.S. corn imports."
The U.S. Grains Council, in August 2011, successfully achieved the inclusion of distiller's dried grains with solubles (DDGS), corn gluten feed and other U.S. commodities on the Saudi Arabian import subsidy list. Inclusion on this import subsidy list is essential in eliciting interest from Saudi importers of these products. This effort paid off when a Saudi Arabian company, ARASCO, purchased a bulk shipment of U.S. DDGS destined to reach Saudi Arabia in January 2014.