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Saudi Arabia Doubles US Corn Imports in 2017: Report

Saudi Arabia, September 5, 2017

Saudi Arabia has nearly doubled its purchases of US corn this year due to a combination of favorable government policy shifts, competitive prices and market development work by the US Grains Council (USGC), US Grains Council said on Friday.

From September-June 2016-17, the Kingdom has purchased 2.07 million tons of US corn, up from the prior five-year average of 861,000 tons. It also has increased purchases of US ethanol to 2.5 million gallons and more than 25,600 tons of distiller’s dried grains with solubles (DDGS).

The USGC said changes to local policy, including adding 14 new feed ingredients to the national animal feed subsidy scheme, has contributed to the increases. The new list of ingredients includes US DDGS and corn gluten feed/meal.

Another policy shift in 2016 started the phase out of domestic wheat production, which had been used for feed, to help conserve water resources. The policy ends a 30-year program for irrigating domestic wheat production and bodes well for increased US exports of corn and co-products, the USGC said.

This demand potential is huge, but requires extensive market development work, the USGC said.

'There is a constant need for market education and customer servicing to address grain quality complaints and the limited knowledge of the US grain marketing and handling system, with key Saudi feed grain importers, end-users and government officials,' said Ramy Taieb, USGC regional director for the Middle East and North Africa.

To accomplish this goal, the USGC sponsored a Saudi buyer team to the council’s biannual Export Exchange in 2016, timed perfectly with the US corn harvest. As a result, the participants reported buying 76,000 tons of corn and DDGS valued at $13 million.

In 2017, the council continued these efforts with a team in August that brought key feed grain importers and end-users to Illinois, Virginia and Louisiana to see firsthand US feed grain production as well as meet face-to-face with US suppliers and exporters. The team also learned more about how grain moves through the logistics channels for export markets, quality preservation throughout the supply chain, quality assurance by FGIS, best buying practices and contract specifications.

'Through these activities, the Council is building not just a short-term market, but long-term Saudi confidence in food security through trade,' Taieb said. 'We are reassuring this growing market that US corn and corn co-products will be available in abundant quantities at a reasonable price to sustain Saudi meat, milk and egg industries.'