(Resource News International) –– Saudi Arabia has become a major wheat importer over the past year, taking a large portion of Canadian wheat in its tenders, while some U.S. wheat exporters have complained Canada was discounting its wheat to make the sales.
However, the Canadian Wheat Board contends that while the Saudi Arabian market is competitive, the marketing agency’s goal remains obtaining the best returns for farmers.
Saudi Arabia has imported 2.2 million tonnes of wheat since September 2008, according to the Saudi Arabia Grain Silos and Flour Mills Organization, or GSFMO.
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While Saudi Arabia was never a wheat importer in the past, the country is phasing out domestic wheat production in an effort to conserve water and plans to import three million tonnes of wheat a year by 2016, according to reports from the GSFMO.
Of that 2.2 million tonnes imported so far, Canada sold a total of 804,900 tonnes of wheat to Saudi Arabia in 2008-09, according to Canadian Grain Commission data. That compares with no exports to the country the previous year.
U.S. Wheat Associates has claimed in recent news reports out of Saudi Arabia that Canada was able to take a larger share of the business by using aggressive pricing tactics to undercut its competitors.
However, the CWB denied the Arlington, Va. organization’s claims.
As an organization, the CWB does not comment on specific sales, but spokesman John Lyons thought the U.S. complaints were unfounded and were likely the result of disappointment over losing out on the business.
“As a farmer-driven and farmer-controlled organization, our goal is always to get the best returns possible for farmers,” said Lyons, “so we have no incentive to discount in the way they are talking about.”
Looking at Saudi Arabia in particular “it’s fair to say that it’s an extremely competitive market,” he said. He thought the U.S. was essentially complaining that in a competitive market they didn’t make the sale.
Saudi Arabia is a new market, and “it is an area we would like to keep doing business with,” Lyons said, adding that the CWB will continue to look at any tenders as they come forward.
