(Posted Mon. Apr 21st, 2014)
U.S. corn sales and shipments to the Middle East and North Africa have rebounded sharply in the 2013-14 marketing year following two consecutive years of low market. From the beginning of the marketing year through April 10, outstanding sales and accumulated exports of U.S. corn to North Africa and the Middle East are approximately 112 million bushels, up from eight million bushels the previous year over the same time period and 43 million bushels during that period two years prior.
Corn exports to Egypt led the surge in trade with 72 million bushels in outstanding sales and accumulated exports of U.S. corn by April 10, 2014. Saudi Arabia further bolstered the total with 24 million bushels during that period with Israel, Algeria, Morocco and Tunisia adding the difference at eight, three, three and two million bushels of U.S. corn imports respectively.
Several factors underlie the resurgence, including the largest-ever U.S. corn crop in 2013, meaning an abundant supply of competitively priced U.S. corn for buyers around the world. Buying patterns may have also been influenced by recent political strife in Ukraine which has caused that country’s corn prices to rise and led to buyer concerns over reliability in the coming months.
"In the past, proximity and resulting freight advantage of Ukraine and other Black Sea-region corn has been a major reason for eroding U.S. corn market share in the region," said Cary Sifferath, U.S. Grains Council regional director of Middle East and Africa. But the balance has shifted. "Besides the revival of the Egypt market, we've seen buyers in Tunisia, Morocco, Algeria, Nigeria, Israel and Saudi Arabia purchasing U.S. corn this spring," Sifferath said. "And we've seen U.S. corn being shipped to EU destinations, as well."
Other major U.S. competitors in the region include Brazil and Argentina. Currently, Brazilian corn is being offered for July and August shipment. U.S. corn has been competitively priced when compared with the new crop of Argentine, when assuming U.S. shipments from east coast ports. Some shipments have already arrived, while others will take place over the next three months. Importers in the Middle East and North Africa have expressed satisfaction with the quality of U.S. corn compared to corn previously imported from the Black Sea region.
"We have started to roll-out the positive findings in the 2013/2014 Corn Export Cargo Quality Report, which should lead to additional sales," Sifferath said.
However, Sifferath cautions that even with Ukraine's continuing geo-political issues and worries about timely delivery from South America, especially after major delays last year, he does not expect these tough competitors to disappear from the Middle East and North Africa.
The National Corn Growers Association supports these efforts through its collaborative work as a founding member of USGC.