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Saudi Arabias barley imports for the first six months of MY 2021/22 is estimated at 2.36 MMT

09.02.2022 17:32 "Agro Perspectiva" (Kyiv) Following are selected highlights from a report issued by a U. S. Department of Agriculture attache in The Riyadh, total Saudi feed barley consumption for MY 2021/22 is estimated at 5.4 MMT, down 13 percent from USDAs official estimate of 6.2 MMT. Over the previous seven months, the weather throughout the

production season was atrocious (high temperatures and no rainfall) compared to the previous year creating poor pasture-like conditions for livestock. As such, demand for barley and processed feed should have increased, but the exact opposite occurred. While there is no definitive explanation for the significant decrease in local barley consumption this marketing year, most experts attribute it to the mass exodus of local farmers from the livestock industry.

According to numerous local feed producers, the demand for processed feed decreased 30 percent over the past three months even though a 50-kg bag of processed feed was priced $2.13 below a 50-kg bag of barley. While no recent official government data is available, some contacts believe that a significant

number of local livestock farmers exited the profession due to increasing barley prices mixed in with a low fixed government monthly cash payment to farmers. Others say demand is low because of the continued exit of recreational farmers, who usually keep a few hundred sheep or goats, but departed due to higher farming costs. However, other experts believe demand is down because farmers are reducing waste, thus buying less barley.

Trade

Recent available data shows that the Kingdom imported approximately 2.36 MMT of barley in the first six months of MY 2021/22 (July — December 2021), a reduction of 41 percent compared to the same period last year (4 MMT). Imports are down mainly due to acute freight shortages from supplying countries along with decreased demand. Nevertheless, forthcoming improvements in freight logistics in Australia is expected to expedite the shipment of barley to Saudi Arabia, propelling the country forward as the dominant supplier to the Kingdom.

Per domestic and international grain traders, Australia exported an average of 382,000 MT per month of barley to Saudi Arabia since November 2021, and it is expected to continue for the rest of this marketing year. Australia is the most competitive barley exporter to Saudi Arabia, and it is projected to supply

approximately 420,000 MT to Saudi Arabia per month for the remainder of this marketing year;

enabling the country to supply about 70 percent of the forecasted total (5.2 MMT, 16 percent below USDAs official estimate). Meanwhile, total Saudi barley imports for MY 2021/22 were reduced approximately 25 percent compared to MY 2020/21 imports of approximately 7 MMT.

Local Barley Compared to Compound Feed

Currently, a 50-kg of barley is sold for $19.32 inclusive of the 15 percent VAT at packing terminals while the same quantity was sold for $15.74 in August 2021. Various experts indicate that the increase in domestic barley price has forced a number of smaller livestock producers (goat and sheep) to leave the industry. As a result, ARASCO has maintained the wholesale price of its 50-kg bag of «Wafi» compound feed at least 8 Saudi Riyal (SAR), or $2.13 USD, below the price of barley of the same weight. ARASCO is also keeping a lower price to educate livestock farmers about the cost and weight gain benefits of its feed compared to grain barley.

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