This article was written for the Alberta Barley Commission’s Barley Country blog. The original version of the article can be found online.
Canada produces eight million tonnes of barley each year, exporting up to 25 per cent of this. In the 2012–2013 year, 2,154 kilotons of barley was exported.
The U.S., Japan and China are Canada’s top three barley export destinations. Interestingly, Saudi Arabia is currently the world’s top barley buyer, having imported more than seven million tonnes in the 2013–2014 year.
As Canada is one of the largest barley producers in the world, the potential of the barley export market in the Middle East is huge.
Barley Usage in the Middle East
Nicole Rogers, principal of Agriprocity, an agricultural partnership company based in the United Arab Emirates (UAE), explains why the Middle East is an exciting part of the world for Canadian barley. Already import-dependent due to less-than-ideal growing conditions, the booming population of this area means there will be a continued need for barley.
Rogers adds that the Middle East is established in the dairy industry, but being entirely dependent on agriculture imports means importing animal feed as well. A growing population means more animals, and therefore more feed. Additionally, Saudi Arabia processes imported barley to then export around the region, the bulk of which is sent to the UAE.
Canada’s Trading with the Middle East
The UAE imported more than $700 million of agri-food products from Canada in 2011. Despite the need for barley in the Middle East, the amount exported from Canada has decreased over the last five years. In 2008, $225 million worth of Canadian barley was exported to Saudi Arabia; in 2011, just $48 million was exported there. With Australian, British and Ukrainian barley also being exported to the Middle East, Canadian barley has competition.
Another reason for this decrease, according to Rogers, is the hesitancy of Canadian farmers to enter the market.
“The culture of business is unfamiliar, which can be a challenge,” said Rogers.
Where the Market is Headed
Middle Eastern buyers are particularly interested in the Canadian farming model, which is the small farm model instead of the mega farm model of agriculture, mainly because of partnership opportunities and limited bureaucracy. The opportunity for long-term planning, as well as Canada’s overall security, makes trade with Canada appealing.
Companies like Agriprocity encourage farmers to grow on a longer-term contract and create a partnership with the Middle Eastern buyer.
“There’s more transparency, a better understanding, and the long-term contract means fluctuations won’t negatively impact the farmer,” said Rogers.
She explained that, while this trading innovation is still very much in its infancy, this is one potential way for Canada to take advantage of the growing barley demand in the Middle East.
The Middle East’s dependence on agriculture and its booming population means its need for barley will only increase, making it an area of great potential for Canadian barley.