Saudi buys 50,000 tonnes of barley from Openfield co-op
The sale marks the second year in a row Saudi Arabia bought 50,000 tonnes of the grain from Openfield’s growers. According to the co-operative, the UK exports around 100,000 to 300,000 tonnes of barley a year to Saudi Arabia, depending on the harvest.
“We negotiated the sale to Saudi Arabia in the spring of 2014 ahead of what we knew would be a sizable harvest. Being able to load Panamax class vessels is a requirement of international buyers and was central to securing the deal,” said Mark Worrell, director of sales and trading at Openfield.
“The shipments to date are a clear demonstration of our market reach and further support our ambition to seen as a partner able to serve the needs of international buyers,” he added.
Domestic barley dries up
Saudi Arabia is the world’s largest barley importer, mostly due to its demand for the grain as animal feed. Last year the country imported a record 9.5 million tonnes of barley, and this year it is forecast to import 7.5 million tonnes, according to US Department of Agriculture (USDA) figures.
Over the past few years Saudi Arabia has moved away from domestic production of grain crops, in order to preserve its increasingly scarce ground water. Instead, it plans to rely on imports for almost all of its grain requirements.
“Barley production in Saudi Arabia is currently estimated at 15,000 [tonnes], mostly for human consumption. The Saudi government terminated its barley production subsidy program in 2003, bringing an end to two decades of commercial barley production in Saudi Arabia, where domestic barley production reached its peak at 2.2 million [tonnes] in 1993. The government stopped feed barley production in order to conserve scarce water resources, as the Saudi barley crop is 100% irrigated,” said the USDA’s Grain And Feed Annual in February this year.
Go big or go home
In recent years, Argentina, Ukraine, Australia and Russia have been the largest barley exporters to Saudi Arabia. The British contribution, while small, does benefit from its ability to load a large quantity of grain in a single shipment, according to Openfield.
“Saudi Arabia has a preference for larger vessels, typically those capable of carrying between 45,000 and 60,000 tonnes. There are a limited number of grain terminals able to service these vessels with Bristol’s Portbury Grain Terminal [used by Openfield] being just one example,” said Katie Fluen, marketing and communications manager at Openfield.
“At Openfield we reckon to load between 50,000 and 100,000 tonnes each year into the class of vessel required by international buyers, assuming market conditions permit,” she added.