The U.S. government recently announced the expansion of a credit program designed to encourage the importation of American agricultural products into Africa and the Middle East. The US Department of Agriculture’s Foreign Agricultural Service (FAS) has allocated $100 million to further support importation. The US share of the agricultural market in the MENA region has fallen significantly over the last decade.
The Export Credit Guarantee Program (GSM-102) provides credit guarantees to bolster the exportation of U.S. goods to foreign markets. Focusing on agricultural products, it is hoped that these guarantees will encourage growers to export to export to developing countries that have sufficient foreign reserves to arrange scheduled payment, according to the FAS government website. GSM-102 is currently available to exporters of high-value, consumer-oriented, processed products such as frozen foods, fresh produce, meats, condiments, wine and beer, intermediate products such as hides, flour and paper products and bulk products such as grains, oilseeds and rice.
The move comes at a time when American wheat growers have approached Algerian government about the possibility of switching from the production of French soft bread wheat in favour of durum and bread wheat. The proposed changes would potentially create a market for American wheat in the North African state. “There is an opportunity to foster demand for U.S. wheat to blend with Algerian standard flour,” said Ian Flagg, the US Wheat Association’s Regional Director for the Middle East, East and North Africa, who will travel with the team. “The goal of this visit is to demonstrate the versatility and quality of U.S. bread wheat classes and reinforce the value of U.S. durum wheats for semolina.”
Demand for livestock feed and corn within The MENA region has grown rapidly in the past 20 years. At present, the U.S. provides approximately 10 per cent of imports, down from approximately 70 per cent during the mid-1990s. American sales have suffered in the face of Russian and Ukrainian competition, which benefit from transport cost advantages over their American counterparts. Egypt and Saudi Arabia represent the largest markets for American corn. In order to address the country’s need for vast quantities of corn, Saudi Arabia has been purchasing stakes in agricultural companies in America and Canada in recent years.