A highly competitive marketplace, quickly changing market environment and considerable growth potential require the U.S. Grains Council (USGC) to rapidly respond to marketing opportunities when they arise in the Middle East. At the same time, the Council must deploy long-term marketing strategies, as it has done for decades, to build the relationships necessary to seize these chances to increase exports of U.S. coarse grains and co-products to the region.
Council staff and consultants interacted with high-level officials and decision-makers during the Global Grain MENA Conference in June in the United Arab Emirates to work toward both short- and long-term success. The event included major international grain companies, stakeholders and importers and feed millers from the United Arab Emirates, Egypt, Lebanon, Turkey, Saudi Arabia, Jordan, Pakistan and Oman.
“This global grain conference was interesting and fruitful for liaising with different stakeholders in the region, including the main market players, influential traders and key Council partners,” said Ramy Taieb, USGC regional director for the Middle East and Africa. “Maintaining existing partnerships and building new relationships with importers, government officials and respected organizations is paramount to boost the success of the Council’s activities.”
The conference allowed the Council to promote U.S. corn, sorghum and co-products to importers and end-users. USGC Manager of Global Trade Alvaro Cordero presented on the outlook for sorghum and dried distiller’s grains with solubles (DDGS) markets in the region as well as how U.S. exporters are adapting to increasing competition in the global marketplace.
“I wanted to share a positive message about the reliability of and marketing for U.S. coarse grains and co-products,” Cordero said. “With China continuing to purchase outside of the United States, production challenges in the Black Sea and record U.S. corn crops in the field, there are good indicators that buyers in the Middle East will continue buying from the United States.”
Supply and demand factors set the stage for U.S. DDGS and corn to enter Middle Eastern markets. U.S. coarse grains and co-products compete here with all other origins. But, China has purchased primarily Ukrainian corn in recent years, which has drained the availability of supplies from the Black Sea and made that grain more expensive than U.S. corn. As a result, countries throughout the region that typically purchase Black Sea corn are switching to U.S. origin.
Countries in the Middle East region imported 4.5 million metric tons of U.S. corn, sorghum and co-products in the 2016/2017 marketing year, signaling significant and growing opportunities for U.S. exporters.
Buyers like Saudi Arabia are not only increasing purchases, but also gaining appreciation of overall quality of U.S. coarse grains and co-products. Saudi Arabia purchased 2.14 million tons (84 million bushels) of U.S. corn, ranking as the seventh largest overseas buyer of U.S. corn, plus 48,600 tons of U.S. DDGS. In the 2017/2018 marketing year, Saudi Arabia has also added sorghum to its purchasing portfolio, purchasing 280,000 tons (7.1 million bushels) of U.S. sorghum to date.
“The Middle East market has always been challenging but valuable,” Cordero said. “With work and favorable conditions, we are expecting even these markets to be ones the United States does not just take, but keep.”
About The U.S. Grains Council
The U.S. Grains Council develops export markets for U.S. barley, corn, sorghum and related products including distiller’s dried grains with solubles (DDGS) and ethanol. With full-time presence in 28 locations, the Council operates programs in more than 50 countries and the European Union. The Council believes exports are vital to global economic development and to U.S. agriculture’s profitability. Detailed information about the Council and its programs is online at www.grains.org.