Australia & Saudi Arabia: Australia and Saudi Arabia sign 5 year barley agreement

A new five-year agreement with Saudi Arabia's United Feed Company (UFC) will see the Australian Barley Board (ABB) continue to provide Australian grain to one of the world's largest feed barley markets, LexisNexis reported September 20. The memorandum of understanding struck between ABB and the UFC in June, extends the long-standing supply arrangement that began almost 10 years ago.

Valued at $1 billion, ABB chairman Perry Gunner said the landmark agreement demonstrated ABB's continued progress at an international level.

"This agreement provides a solid, long-term support base for Australian barley, which is highly regarded by customers in the Middle East," he said.

"It's a significant coup for Australian barley growers and for ABB, showing long-term support for Australian-grown grain.

"It's also testimony to the value of developing close, trusting relationships with international customers and their confidence in our ability to supply very large volumes of grain."

The cooperation between ABB and UFC began in 1998. In the years since, ABB has supplied more than eight million tonnes of barley to UFC and up to two million tonnes of grain a year. "This new agreement is a great reflection on the relationship that has been built up over the years between the two companies." Mr. Gunner said.

He also said Saudi Arabia, with more than 27 million occupants, was experiencing rapid growth.

As the world's largest feed barley buyer, Saudi Arabia annually imported around 7.5 million tonnes of barley, with UFC accounting for the lion's share of the grain tonnage.

UFC Chairman Mr. Emad al- Muhaidib said his company's long-standing relationship with ABB was a valuable one.

"The agreement highlights the strong relationship we have with ABB as a reliable supplier of barley," Mr. Al-Muhaidib said.

"It allows us to add value to our business and end customers."

As is already the case with grain delivered to UFC, the new agreement will see the barley delivered bagged and branded with the ABB logo before being supplied to Saudi Arabia's farming community. The ABB logo has become synonymous in this area with quality feed grain and is a much sought-after product.

Mr. Gunner said ABB Grain and UFC had agreed to also explore other business ventures for future expansion of their current relationship.

26 September, 2007