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Saudi-Arabia-Trade-Team-To-South-Dakota-Following-Export-Exchange-2018-2-e1555618027962.jpg U.S. Grains Council

Trade policy, developing markets key to capturing Saudi Arabia grain demand

Saudi Arabia is a large and expanding market with highly concentrated dairy and poultry industries.

The U.S. Grains Council (USGC) said it is currently 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.

According to USGC, 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, 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 augmented the connections made during Export Exchange, the council’s largest biennial buyers conference, held in Minneapolis, Minn., in October 2018. USGC 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. grain 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% of the poultry market, and nine farms control 85% of the dairy market. Imports represent an increasing portion of the feed rations for these animals. Last marketing year, Saudi Arabia ranked as the 10th-largest overall buyer of U.S. corn, importing 1.49 million metric tons (58.7 million bu.), in addition to 280,000 mt (11 million bu.) of U.S. sorghum and 13,000 mt of U.S. dried distillers grains with solubles (DDGS). Saudi Arabia also imported 16.5 million gal. of U.S. ethanol.

USGC further noted that 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 which grains, co-products and forages the Saudi feed, livestock and poultry industries import. USGC worked to obtain inclusion of DDGS, corn gluten feed and other U.S. commodities on this import subsidy list. As the Saudi 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 reshape traditional feed grain import patterns.”

USGC said it will also 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 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 U.S. 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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