Saudi Arabia 'to become major player' in world corn market

07.04.2017

Saudi Arabia is to become a "major player in the corn market", thanks to a switch away from barley in animal feed which will spur a rise too in wheat imports, which also face a boost from drive to boost religious tourism.

The US Department of Agriculture's Riyadh bureau, in its first forecasts for Saudi Arabian grains supply and demand in 2017-18, pegged corn imports at a record 4.30m tonnes, a rise of 400,000 tonnes.

And imports appear set to continue growing thanks to a curb by the water-short country on domestic production of green forage, output of which reached some 4m tonnes in 2015, while the country is cutting too its traditional reliance on barley for feed.

"The main reason for the decline in projected feed barley consumption," seen falling to a six-year low of 8.0m tonnes next season, "is increased demand for processed feed due to its price competiveness and perceived nutritional value", the bureau said.

'Major player'

Barley's declining popularity, at a time when green forage is being phased out, "will benefit" consumption of substitutes, including corn and feed wheat.

Indeed, "as the domestic feed processing is expected to drastically increase in the next few years, Saudi Arabia will become a major player in the global corn market," the bureau said.

Corn is particularly popular with the country's growing broiler industry, comprising some 60% of poultry feed in domestic formulations.

"It is also a key feed grain used by commercial feed processors and domestic dairy farms."

Rising wheat imports

The spillover demand for feed wheat, meanwhile, will come at a time when imports of milling wheat are already being spurred by population growth, with Saudi Arabia's own production sidelined by measures aimed at water conservation.

The bureau estimated the country's overall wheat imports – of which the vast majority are for milling, from hard wheat origins such as Germany and Lithuania – rising by 200,000 tonnes to a record 3.70m tonnes.

And needs could take a further jump if the government succeeds in measures to boost Islamic tourism which attracted 8m pilgrims to the Mecca Al-Mukarama region last year for the umrah ritual.

'Surge in pilgrims'

"The government is working to increase the number of religious tourists coming to perform umrah… to 15m by 2020, and 30m by 2030," the bureau said.

"The forecasted surge in pilgrims is expected to increase the demand for wheat flour and other food products in the next few years."

Currently, average per capita consumption of wheat in Saudi Arabia is 239 grammes per day, or 87 kilogrammes per year.


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