Doing Business in Saudi Arabia - International Franchise Association

Best Prospects for Agricultural Goods and Services (Values in Millions U.S. Dollars)
CORN (0440000) Return to top
Overview
Yellow corn is used principally in poultry feed and to a lesser extent in livestock rations. The
Saudi government 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 self-sufficiency levels to about 55% in 2008. Saudi
Arabia imports about 2 million metric tons of yellow corn annually and its value is projected to
reach $470.million by the end of 2009. Argentine remains the largest yellow corn supplier to
Saudi Arabia followed by the U.S. and Brazil.
U.S. feed corn exports to Saudi Arabia for the months of January-October 2009 decreased by
51 percent over the same period in 2008 ($70 million vs. $141 million). The higher U.S. corn
prices compared to Latin American prices are the main reason for the decline of U.S. corn
export to Saudi Arabia in 2009. The sharp decline in the world feed corn prices, which started
at the end of 2008, has helped the Saudi government reduce its feed corn import subsidy from
$266.67 per metric ton in March 2008 to $60.26 in January 2009. The rebate is paid directly to
importers.
Year/Description 2007 2008 2009
Total Consumption 706 604 474
Total Local Production 6 4 4
Total Exports 0 0 0
Total Imports 694 600 470
Imports from the U.S. 180 141 80
Source: Trade estimates and U.S. Customs Official Data
Value: In millions of U.S. dollars
SOYBEAN MEAL (0813100) Return to top
Overview
Soybean meal is used principally in poultry feed and to a lesser extent in livestock rations. The
continued expansion in local poultry production has increased the demand for soybean meal by
more than 5 percent per annum in recent years. In the past few years, a huge price difference
between Latin American and U.S. soybean meal has made imports from the United States less
competitive and drastically reduced U.S. market share in Saudi Arabia. According to a recent
U.S. Customs data, U.S. soybean meal exports to Saudi Arabia declined by 44 percent for
January-October 2009 over the same period last year ($44 million vs. $79 million). The
increases in the total values of soybean imports in 2007 and 2008 reflect the drastically
increased world soybean meal prices which reached $650 per metric ton in early 2008. The
prices stared to decline in late 2008 reaching $500 per metric ton at the end of November 2009.
The continued decrease in the world soybean meal prices has helped the Saudi government