(Posted Mon. Apr 9th, 2012)
Apr. 9: In a country largely dependent on oil exports, the ethanol industry is often maligned and a large target of contention and discomfort in Saudi Arabia. However, as Venezuela overtook Saudi Arabia to become the owner of the largest share of the world’s known oil reserves in 2011, Saudis are now focusing on the need to diversify their economy, with agriculture garnering significant interest as a new revenue stream.
Already home to the largest dairy integrations in the world, the country once opposed to ethanol now cooperates with the U.S. ethanol industry to satisfy feed demand with ethanol coproduct distiller’s dried grains.
The U.S. Grains Council, which has operated in Saudi Arabia for decades, recently undertook a unique challenge as it launched efforts to expand market access for U.S. DDGS, which are derived from the prohibited alcohol production industry. While initial efforts were met with trepidation, the Council persevered, successfully gaining placement for distiller's dried grains with solubles on the much desirable "feed ingredient subsidy list." Inclusion on this list entails financial support for importers to aid them in bringing foreign feed ingredients to the market in order to reduce water consumption. Encompassing everything from soybean meal to fava beans, values are determined by energy content and protein levels.
To gain placement on the list, the Council addressed the myriad obstacles through an aggressive marketing campaign focused on stimulating demand and improving market access. Now, the Council plans to leverage that success, introducing programming to educate traders and nutritionists about the tremendous benefits of DDGS. Already successful with 16,000 tons of U.S. DDGS entering the Saudi market already, the Council anticipates the demand potential will continue to grow along as increased emphasis is placed upon the importance of the agricultural sector.