Doing Business In Saudi Arabia - Bna

Best Prospects for Agricultural Goods and Services (Millions U.S. Dollars)
CORN (0440000)
Overview
Feed corn is used principally in poultry feeding and to a lesser extent in livestock rations.
The Saudi Agricultural Development Bank has continued financing the establishment of
new poultry farms in various regions of the country. Existing large to medium sized
poultry producers have been expanding in recent years, increasing the country’s selfsufficiency
levels to about 55 percent in 2007. Last year, the value of imported feed corn
was estimated at $336,000,000, an increase of 81 percent over 2006. A sharp reduction
in the Argentine corn exports to Saudi Arabia in the past two years has benefited U.S.
corn exports to Saudi Arabia over the same period despite continued soaring prices
because of global demand for livestock feed, sweeteners and biodiesel (ethanol)
production.
In 2007, U.S. feed corn exports to Saudi Arabia increased by 135 percent over 2006
($146 million vs. $62 million). The continued tight Argentine corn stocks this year are
projected to further increase U.S. market share in Saudi Arabia despite the continued
increase in world corn prices. In January 2008, U.S. free on board (FOB) corn prices
reached $204 per metric ton, a 21 percent increase from January 2007. To lessen the
impact of high world prices for corn, the Saudi government increased its subsidy on feed
corn imports from $42.67 per metric ton to $133.33. The rebate is paid directly to
importers. Currently, Saudi Arabia imports about two million metric tons of yellow corn
annually.
Year/Description 2005 2006 2007
Total Consumption 152 220 336
Total Local Production 5 5 6
Total Exports 0 0 0
Total Imports 160 215 330
Imports from the U.S. 16 62 146
Value: In millions of U.S. dollars
Source: Trade estimates and U.S. Customs official data
5/13/2008