March 20, 2017

Saudi Arabia buys more of US DDGS 

Saudi Arabia imported a total of 18,000 tonnes of US distiller's dried grains with solubles (DDGS), or more than double the 2014 US import volume, making the Middle Eastern country, according to the US Grains Council (USGC), "an example of an increasingly diverse number of markets interested in the feed product and the impact of sustained market development in areas showing potential for long-term growth".

Nevertheless, the USGC said its progress in persuading the Saudi industry to use DDGS has been limited by shipping distance and local subsidies that did not incentivize use of the product.

With the DDGS being priced well in the market, Saudi buyers, as well as others in the region including Egypt, Turkey, Morocco and Pakistan, are taking a closer look at US DDGS, the USGC added.

As part of the USGC's efforts to promote US grains and co-products to Saudi importers and end users, Ramy Hadj Taieb, USGC regional director for the Middle East and North Africa, is visiting Saudi Arabia in March. In addition, the Council is working with agribusiness members on logistical challenges.

Dairy and poultry sectors in Saudi Arabia are large and modern with an estimated annual compound feed demand of 6.9 million tonnes.

"The timing of the purchases by Saudi Arabia could not be better", said Kurt Shultz, USGC senior director for global strategies. "The DDGS export market has been under pressure with a slowdown in exports to key markets like China and Vietnam. However, other countries like Saudi Arabia are helping to fill that void".

"Total DDGS exports are down only 2 percent from last marketing year, highlighting the importance of the Council's marketing efforts and the ability to respond quickly to changing trade flows", he added.

DDGS are the nutrient-rich co-product of dry-milled ethanol production. Its use as a feed ingredient is well documented as both an energy and a protein supplement, according to USGC.