March 17, 2006

 

US wheat industry tries to fight slide in exports

 

 

American wheat producers are seeing yet another customer slip away as higher prices for US wheat drive them into the arms of other competitors. Egypt, who has been among the top US wheat customer in recent years, is importing less, with imports falling from 4 million tonnes in 2000 to 1.9 million tonnes last year.

 

Sales this year fell to 1.06 million tonnes, a quarter of what it was five years ago.

 

In Egypt, about 65 percent of wheat imports are purchased by the government buyer GASC, and 35 percent by private buyers.

 

So far this year, GASC has purchased around 20 percent of its wheat imports from the US. US market share in the private sector market is even more dismal, taking only a 15 percent market share.

 

At a recent wheat tender in Egypt, US soft wheat was offered at US$145 a tonne, at least US$20 over the rest of the other bidders.

 

Recognising this problem, US Wheat Associates (USW) is stepping up efforts to promote the benefits of US wheat.

 

USW argues that using US hard wheat can earn higher profits for Egyptian millers in the higher quality flour market segment.

 

Premium flour sells at $290 a tonne, compared to US$190 a tonne for generic flour.

 

In the past year, demand for better quality flour has started to slowly emerge.

 

USW held a seminar for bakeries that use a special "American Quality Wheat" logo on products which are made with US wheat, and consultants have advised Egyptian mills how to blend US wheat to achieve "American Quality" specifications.

 

USW also conducted seminars for millers and grain exporters where representatives espoused the benefits of US wheat.

 

US Wheat Associates is the industry's export market development organization, working in over 80 countries on behalf of America's wheat producers.