Recent DDGS sales shows potential for long-term growth.
“The timing of the purchases by Saudi Arabia could not be better,” said Kurt Shultz, USGC senior director for global strategies. “The DDGS export market has been under pressure with a slowdown in exports to key markets like China and Vietnam. However, other countries like Saudi Arabia are helping to fill that void. Total DDGS exports are down only 2% from last marketing year, highlighting the importance of the council’s marketing efforts and the ability to respond quickly to changing trade flows.”
The recent sale is an example of an increasingly diverse number of markets interested in the feed product and the impact of sustained market development in areas showing potential for long-term growth.
While the dairy and poultry sectors in Saudi Arabia are large and modern with an estimated annual compound feed demand of 6.9 million tonnes, the USGC said its progress in persuading the Saudi industry to utilize DDGS has been limited by shipping distance and local subsidies that did not incentivize use of the product.
Now, those policies are changing, and DDGS is priced well in the market. As a result, Saudi buyers — and others in the region, including in Egypt, Turkey, Morocco and Pakistan — are taking a closer look at U.S. DDGS.
The USGC said the recent purchase is a clear signal to continue market development, training and marketing efforts in Saudi Arabia to help capture the half million tons of estimated DDGS demand from buyers there.
Ramy Hadj Taieb, USGC regional director for the Middle East and North Africa, will visit Saudi Arabia in March as part of the USGC’s efforts to promote U.S. grains and co-products to Saudi importers and end users. In addition, the council is working with agribusiness members on logistical challenges.
