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Morocco and Tunisia Will be Increasing Imports of DDGS

While distiller's dried grains with solubles are just beginning to make inroads into the North African countries of Morocco and Tunisia, they already have an established base in Israel. Dr. David Hutcheson, U.S. Grains Council consultant and a ruminant nutritionist specializing in the use of corn co-products with Animal-Agricultural Consulting, Inc., spent the last ten days assessing the status of the Council's programs in Morocco and Tunisia and scoping out the market potential of DDGS in Israel. He was accompanied by Kurt Shultz, USGC director of the Mediterranean and Africa.

While in Morocco and Tunisia, Hutcheson visited feedlots which have developed over the past two years due to Council programs aimed at improving beef production in North Africa. The use of DDGS in these feedlots has increased over time, resulting in more imports made by the two countries. According to Shultz, U.S. DDGS imports made by Morocco and Tunisia totaled 60,000 metric tons in 2007, compared to 27 metric tons imported in 2006. An increasing amount of these imports will be headed toward these new feedlots, he said.

In contrast to the emerging market in North Africa, Hutcheson and Shultz learned DDGS have been utilized successfully in Israel where the market is mature and the feed milling sector more sophisticated. "All the importers and feedmillers are very comfortable formulating these co-products and stated very clearly that they value these products as an important component of their feed matrix," Shultz said. "They said imports will continue to grow as the availability of DDGS increases and they become more competitive in the export market." DDGS are used in poultry, ruminant and aquaculture diets in Israel. Hutcheson saw the country's use of DDGS as an example for other countries to mirror.

"The way the Israeli market has embraced and utilized DDGS in their formulations is a model for the rest of the world," he said, adding that based on his meetings and site visits in the country, DDGS are appreciated in Israel and "are here to stay."

According to Israeli importers, Israel imported 71,000 tons of U.S. DDGS and 176,000 tons of corn gluten feed in 2007. The market has imported record amounts of U.S. corn, sorghum and co-products in 2007/08. As of May 1, Israel had imported 1.2 million tons (47 million bushels) of corn, 150,000 tons (5.9 million bushels) of sorghum and approximately 200,000 tons of co-products. These amounts are a direct result of the shortage of feed ingredients in the Black Sea and Europe. However, with the incoming wheat harvest in the Black Sea, importers project the U.S. market share to drop for the rest of the year except for U.S. co-products, Shultz said. This downturn is not unexpected after a year of record U.S. exports. The Council is looking to exploit targeted marketing opportunities for U.S. exporters in this extremely competitive market place.