This Saturday, ten growers will set off with CBH destined for the Middle East for an 8 day tour of Saudi Arabia, United Arab Emirates, Oman and Qatar, aimed at bringing growers closer to the customers and end-users of their grain.
CBH is dedicated to providing growers with a first-hand insight into the international market place for WA grain. Growers attending the tour will get the unique opportunity to understand the local grain quality requirements for specific end products and learn about Middle Eastern consumption trends and demands.
Tour participants Rodney Allen, Yuna, Alex Keamy, Watheroo, Kristen Lefroy, Moora, John Young, Calingiri, Stephen Sprigg, Mukinbudin, Gordon Marwick, York, Colin Nicholl, Hyden, Donald Pentz, Frankland, Tim O’Meehan, Borden, Neville Welke, Esperance will make the trip with CBH staff and Directors.
The Middle East is an important market for Australian wheat and feed barley, however instability in the region and political influence has resulted in fluctuation in demand. Historically, around 40 per cent of Australia’s wheat exports went to the Middle East, but in the five years ended 2009-10 this had fallen to 14 per cent. The Iraq war and past limitations on the Australian wheat trade into Iraq were major factors behind this change.
In past two seasons 2010-11 and 2011-12 exports to the broader Middle East and Africa region have accounted for 20 – 27 per cent of total Australian wheat exports. The Middle East demand for wheat is growing with rising population and living standards the key drivers, while food security is an increasingly important dynamic.
The Saudi Arabian government’s decision to cease domestic wheat production has seen them increase imports. Wheat imports into Saudi Arabia have grown to 2mmt from 2008 to 2010. In 2010 CBH worked closely with Saudi’s sole grain importer, Grains Silos and Flour Mills Organisation (GSFMO) providing technical milling support, paving the way for Australian grain to be accepted into the Saudi market after the importer changed their tender specifications.
It is expected that by 2016, the target date in which all domestic wheat production ceases, Saudi Arabia will have an annual demand for wheat of 3.6mmt, making them one of the key and consistent importers of wheat in the Middle East region.
Traditional rivals, the US and Canada compete with Australia to hold historic wheat market share for against increasing competition from Black Sea origination, while Indian surplus stocks have been aggressively priced into the Middle East in the past two years.
Saudi Arabia also remains the largest feed barley importer in the world, importing more than 7.5mmt annually in recent years. The Middle Eastern market account for about 50 per cent of Australian feed barley export sales. Australian feed barley is generally well regarded throughout the Middle East due to its bright colour.
During the tour group will be visiting key CBH customers and trade organisations, touring local processing plants including flour mills, food and feed production facilities, a large commercial farm in Saudi Arabia and visiting some of the local sites and markets.
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