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Home  »  Ag Sectors

Exporters anxiously watch Mideast turmoil

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Region will still need food, forage but how much is the question


Analysis


By DAN WHEAT


Capital Press


West Coast agricultural exporters have much to be concerned about with the spreading political turmoil in Egypt and the rest of the Middle East.


Egypt is a large importer of U.S. wheat, but in addition to that there's liability with fruits, nuts, vegetables and hay.


If changes in Egypt's government cause trade disruptions, the annual loss for Washington apples alone would be about $12 million. If the whole region -- including our larger export markets of Dubai, Saudi Arabia, Kuwait and Israel -- eliminated U.S. imports, Washington's annual apple loss would be about $62 million.


That's a worst-case scenario. There are any number of lesser possibilities.


"Iran was a huge market for Northwest wheat before the Shah went down and it went to zero and never recovered," said Kevin Moffitt, president of The Pear Bureau Northwest in Milwaukie, Ore. U.S. wheat exports to Iran had fallen to zero by 1983, according to USDA Foreign Agricultural Service. Iran resumed U.S. wheat imports in 2008, when it purchased 1.6 million metric tons.


But Jeff Correa, Pear Bureau international marketing director, said business and politics largely remain separate in the Middle East. He foresees no major losses with new regimes.


Andy Anderson, executive director of the Western U.S. Agricultural Trade Association in Vancouver, Wash., said 13 Western states exported $43 million worth of fruits, nuts and vegetables to Egypt in 2010. Most of that was fruits and nuts. He notes much of the Middle East is not self-sufficient in food and has to buy wheat and grains. His big concern is in the possible loss of processed and value-added products.


Egypt imported 585,589 boxes of Washington apples in the 2009-10 season and 6,555 boxes of Northwest pears. Dubai was the big player at 1.3 million boxes of apples and 252,397 boxes of pears. The whole region took 3.1 million boxes of apples, valued approximately $62 million, and 500,000 boxes of pears valued at $10 million.


Washington Apple Commission President Todd Fryhover will be in Jordan Feb. 14-17, trying to determine how much of Washington's increasing apple trade there is going to Iraq and what he can do to increase that flow. He said he is very concerned about losing Egypt but hopes even a radical regime would want to continue to import some U.S. commodities.


Small amounts of Northwest cherries and potatoes are shipped to the Middle East, sources said, but hay has become an increasingly big export item in the last five years.


While Japan and South Korea buy premium West Coast alfalfa for race horses and dairies, the Middle East is looking for lesser grades to feed camels and goats, said Drex Gauntt, president of the Washington State Hay Growers Association.


Saudi Arabia has been increasing agricultural imports as its deep wells are becoming salty and it's concerned about conserving water for human consumption and using less for animals and crops, Gauntt said.


Nick Gombos is supply chain manager of ACX Pacific Northwest Inc. in Bakersfield, Calif., the largest U.S. exporter of alfalfa. He said the Middle East imports 1.5 million tons of forage annually with 40 to 60 percent coming from the U.S., depending on price and quality.


He's not as worried about losing those markets to regime changes as he is about losing them because of price as U.S. production costs increase.



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