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Saudi Arabia: Saudi Arabia shifts from importing barley as a result of declining corn prices
Barley news

Since 1978/79, Saudi Arabia’s primary feed grain import has been barley, imports of which peaked at more than 10.0 million tons in 2015/16. However, as of September 2023, Saudi Arabia has imported nearly 3.3 million tons of corn, while importing only 3.1 million tons of barley. The shift from barley to corn is a result of declining corn prices, higher demand for processed feeds, and lower global barley supplies, USDA said in its November report.

Over the past year, larger exportable corn supplies led to falling prices for imported corn. Per FAS/Riyadh, cost and freight (CFR) prices for Saudi Arabia corn imports have fallen $60 to $240/ton, while CFR prices for barley have moderated less significantly, hovering around $250/ton. Combined with a declining portion of feed import costs being met by monthly government cash payouts, corn has become a cost attractive option for feed buyers. Locally processed feed using corn can be as much as 35 percent cheaper than imported grain barley.

Additionally, shifting demand drivers within Saudi Arabia support higher imports of corn over barley. Most growth in feed demand is from an expanding poultry industry. Major poultry producers such as Almarai have invested $1.8 billion to double poultry production by 2028. Sixty percent of poultry rations in Saudi Arabia are made with imported corn, meaning demand for the grain will continue to grow with rising poultry production. Conversely, imported barley is mostly used by sheep and goat producers, an estimated 30 percent of whom have liquidated their herds in recent years due to high global barley prices. Sheep and goat producers can also graze their animals on pastureland when available in good condition, avoiding feed purchasing altogether.

Lastly, tighter world barley supplies in 2023/24 also support higher corn imports. Year-to-year declines in production in the EU-27 and Ukraine have tightened exportable supplies, while renewed trade between Australia and China leaves Russia as the only major supplier able to meet Saudi demand in the near term. In contrast, corn exportable supplies are expected to remain substantial in 2023/24. Saudi Arabia is forecast to import 4.9 million tons of corn in 2023/24, compared to just 3.9 million tons of barley in the same period.

09 November, 2023
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