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Trade Policy, Market Development Work Key To Capturing Demand In Saudi Arabia | KTIC Radio

Trade Policy, Market Development Work Key To Capturing Demand In Saudi Arabia

Trade Policy, Market Development Work Key To Capturing Demand In Saudi Arabia
The Council is very active in responding to market promotion opportunities in Saudi Arabia, working to provide a consistent flow of information about the U.S. grain trade, supply and demand factors, quality and more.

A consistent flow of information combined with more than three decades of relationship building are bolstering market opportunities in Saudi Arabia. As part of these efforts, U.S. Grains Council (USGC) staff traveled to the Kingdom in late March to promote U.S. corn, sorghum and co-products during meetings with key buyers and end-users.

The trade servicing mission augments the connections made last fall during the Council’s largest biennial buyers conference, Export Exchange, held in Minneapolis in October 2018. The Council organized an eight-member team from Saudi Arabia to attend the meeting, providing opportunities for participants to develop closer business relationships with members of the U.S. grains industry and gain additional insights into the U.S. grain export value chain.

“Saudi Arabia is considered a growing, but competitive, market for the Council,” said Ramy Taieb, USGC regional director for the Middle East and Africa. “Follow-up visits and meetings with major importers are essential for the growth of U.S. grain exports to this market.”

Saudi Arabia is a large and expanding market with highly concentrated dairy and poultry industries. Fifteen farms control 80 percent of the poultry market, and nine farms control 85 percent of the dairy market. Imports represent an increasing portion of the feed rations for these animals. Last marketing year, Saudi Arabia ranked as the tenth largest overall buyer of U.S. corn, importing 1.49 million metric tons (58.7 million bushels) in addition to 280,000 tons (11 million bushels) of U.S. sorghum and 13,000 tons of U.S. dried distiller’s grains with solubles (DDGS). Saudi Arabia also imported 16.5 million gallons of U.S. ethanol.

Potential opportunities are also being created for U.S. feed grains and co-products as the Saudi government shifts policies to reduce subsidized barley imports and domestic wheat production as part of water conservation initiatives. In Saudi Arabia, the government’s feed subsidy structure is the major driving force behind what grains, co-products and forages are imported by the Saudi feed, livestock and poultry industries. The Council worked to obtain inclusion of DDGS, corn gluten feed and other U.S. commodities on this import subsidy list. As the government continues to revise these subsidy rates, more imported corn or sorghum could replace other feed ingredients in animal feed rations.

“This policy change bodes well for an already growing market,” Taieb said. “The Council will continue to monitor these developments and adjust marketing programs as these policy changes begin to re-shape traditional feed grain import patterns.”

The Council will continue to work with buyers and end-users in Saudi Arabia to provide a consistent flow of information about the U.S. grain trade, supply and demand factors, quality and more to create a long and strong relationship between major feed grain importing companies and U.S. producers.

Funding from the U.S. Department of Agriculture’s (USDA’s) Agricultural Trade Promotion (ATP) program is helping expand this engagement, by adding promotions of sorghum and DDGS in Saudi Arabia; bringing large importers and end-users to a buyers conference in Europe this summer; and organizing a team of Saudi buyers and end-users to travel to the United States this fall.

“The Council is very active in responding to market promotion opportunities in Saudi Arabia,” Taieb said. “Saudi Arabia is the largest U.S. corn buyer in the region, and we need to continue building on this success.”

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