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Bid to boost Saudi poultry exports

05 April 2007

SAUDI ARABIA - According to a USDA Foreign Agricultural Service Annual Report, despite generous government subsidies and a rising population, Saudi Arabian poultry producers are facing robust competition from imported frozen chickens.

Brazilian-led imports now account for a 44 per cent slice of the Kingdom’s domestic market valued at US$ 1.6 billion annually. Reacting to this ‘Samba’ invasion, some Saudi producers of poultry meat are now searching for export markets elsewhere in the region. To help achieve their aims, major Saudi poultry exporters are participating at the Poultry & Livestock exhibition, a dedicated vertical sector at AGRA Middle East, the region’s premier agricultural event.

More than 100 leading international agribusiness-related producers and suppliers will be on show at AGRA Middle East, including over 30 companies from within the poultry and livestock sector. Representing Saudi Arabia, are industry heavyweights, Radwa Food Product Company, one of the largest poultry farms and poultry products processing and manufacturing companies in the region along with the Saudi Agricultural Development Company, (SADCO), who is one of region’s largest agribusiness groups involved in poultry breeding and distribution of poultry products.

Michael Hanlon, Exhibition Manager for AGRA Middle East show at IIR Middle East, said, “Although they have a growing consumer market and already protected by a 20 per cent import tariff, Saudi poultry producers continue to lose domestic market share to cheaper frozen imports predominantly from Brazil. They are fighting back, lobbying government for higher import tariffs and subsidies, but searching strategically for new more lucrative markets now seems firmly on their agenda and AGRA is perfectly placed to help them achieve their plans.”

Annual consumption of poultry meat in the Kingdom is estimated at over one billion kilos per annum, and Saudi government support is designed to compensate for the higher local production costs, which in some cases is up to US$ 580 per metric ton more expensive than Brazilian imports.

Originally aimed at attaining self-sufficiency, the Saudi government’s support could now encourage new export drives. New and extended poultry farms qualify for government grants and interest free loans and producers receive 25 per cent towards the cost of certain capital equipment. In 2004 a new scheme was introduced, designed to help construct cold stores, as well as schemes to attract investment in the latest production technologies. Saudi Arabia's poultry export ambitions will doubtless increase the current 10,000 metric tons, with countries such as Qatar, Bahrain, Kuwait, U.A.E., Oman and Yemen being targeted.

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Source: Mena Report





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