Grain producers eye two key export markets

Attendees of the U.S. Grains Council’s Annual Board of Delegates Meeting in San Diego, Calif., got a closer look at international markets this week.

Tommy Hamamoto, USGC director in Japan, and Joe O’Brien, USGC regional director in the Middle East and Subcontinent, gave insights of the complex markets of Japan and Saudi Arabia and discussed the current and future Council programming in those countries.

“Saudi Arabia is the land of opportunity for U.S. farmers,” said O’Brien, claiming Saudi Arabia as one of biggest allies of the United States. “Saudi Arabia is a wealthy country, growing in population by 2 percent per year. This and due to its lack of natural rainfall, Saudi Arabia aspires to replace all domestic grain production of water-dependent crops like corn and wheat with imports.”

The Kingdom of Saudi Arabia’s Ministry of Commerce and Industry imposes an import feed ingredient subsidy program to regulate and promote the importation of feed ingredients. The program has gone through several revisions, each time reducing its allocations. As this happens, opportunities grow for U.S. barley, corn, sorghum and their related co-products to penetrate the market. O’Brien said the subsidy list does not currently include distiller’s dried grains with solubles (DDGS).

“Saudi Arabia has no interest in importing commodities that are not currently on the list,” said O’Brien. “There is likely to be another revision in October and there is a good chance for DDGS to be included. Saudi Arabia has one of the largest dairy industries in the world. Once we get DDGS on the list, there will be significant shipments of U.S. DDGS to Saudi Arabia. The Council is working with local producers, feed millers and expert industry representatives to ensure DDGS will be included on the list.”

The Council’s Japan office strives to maintain the 88 percent U.S. market share of imported DDGS and the 99 percent U.S. market share of imported corn in Japan. Food and feed barley also provides U.S. farmers’ opportunities in the healthy foods market.

“The Japanese livestock industry recognizes DDGS as an abundantly available feed ingredient and will continue to use it in their feed rations,” said Hamamoto. “Every year since 2004, Japan doubled its imports of DDGS, importing 240,000 metric tons in 2008. So far this year through March, Japan has imported 50,000 tons of U.S. DDGS. We do not anticipate the 2009 importation to follow the previous years’ trend, but we do expect it to increase from 2008. Livestock sectors are regularly using it at higher inclusion rates and we are beginning to see interest in the aquaculture sector. The Council will begin feeding trials and educational seminars to fully capture this market.”

TAGS: Outlook
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