Facing rising tariffs in China, Australian barley farmers have recently refocused their attention on Saudi Arabia, following a recent bumper harvest season.
“For the first time in about five years, Australia has meaningfully broken into the Saudi market, beating usually fierce competition from other suppliers, and there are signs that sales will continue at least until the middle of the year,” Andrew Whitelaw, an agricultural analyst at Thomas Elder Markets, told Bloomberg.
“We lost China,” Melbourne-based Whitelaw said. “If you look at the last three tenders in a row, we got the lion’s share of most of that . . . In terms of volumes to Saudi Arabia, we’re getting more than anyone else.”
Saudi Arabia, which uses most of the barley as feed for sheep, camels and goats, competes with China to be the world’s top barley importer. Saudi Arabia has been ahead during the past two years, while China has been edging forward this year, according to data from the US Department of Agriculture (USDA).
While Australia has seen increased business, barley imports from the US have dropped. According to the Foreign Agricultural Service (FAS) of the USDA, Saudi Arabia’s barley imports are expected to slip as the government transitions industry toward a focus on local production. The USDA estimates the Kingdom’s barley imports in the 2020-21 marketing year to fall to 6.2 million tons, down from its previous forecast of 7.6 million tons.
As part of the refocusing on the local market, in a bid to become more self-sufficient, AlRaha AlSafi Food Company in January announced the $540 million acquisition of the First Milling Company (MC-1).
Tariq Almutlaq, chairman of AlRaha AlSafi Food, told Arab News: “The acquisition represents an attractive opportunity for the private sector to invest in one of the largest flour markets in the Middle East with high and appealing growth rates, to further boost private sector productivity and improve product quality.”