SFGCU PJSC is one of the leading exporters of wheat by-products to MENA region. It increases supply to this direction year by year and is looking for new outlets and new ways of delivery. In May, SFGCU shipped the first lot of wheat flour by sea to North Africa. It was the first time Ukraine shipped wheat flour by water.
Gennadiy Gordienko, the head of department of elevators activity and finished product selling of SFGCU PJSC told us about results of the first half of 2016/17 MY, main trends, prospects and expectations.
- SFGCU is one of the leading exporters of wheat by-products to MENA. What are the result of your activity in the first half of 2016/17 MY?
- State Food and Grain Corporation of Ukraine exported about 31 thsd tonnes of wheat by-products over the mentioned period. More than 9 thsd tonnes of flour and about 12 thsd tonnes of wheat brans were shipped to MENA region.
Palestine and Israel are the main importers of Ukrainian flour. Shipments of the product to UAE are growing too.
Turkey is the main destination for Ukrainian wheat brans, it imports about 95% of total volume.
- Tell us about trade with MENA over the last years.
- We started to export flout to Libya last season and shipped two cargoes, 5 thsd tonnes each. We exported 2.5 thsd tonnes of flour to the country in the first half of 2016/17 MY and started to supply the product to Somalia. Export to Palestine and Israel are stable.
Moreover, SFGCU is developing cooperation with Iraq, Syria and Yemen. Currently the volumes are low about 200-300 tonnes per month, but we plan to increase shipments to these destinations significantly. Consumption of flour in these countries are high, Iraq consumes about 2.3 mln tonnes of the product per year, Syria – 500-600 thsd tonnes, Yemen – 150 thsd tonnes. Thus, the markets are very promising.
- Why the region is so attractive for Ukrainian exporters of flour?
- Absence of severe quality requirements for flour in MENA region is the key reason. Ukrainian flour fully meets quality standards of these countries. At the same time, higher consumption due to population growth, changes in diet and enlargement of humanitarian supplies are the main reasons of higher flour volumes shipped to the region.
-What countries are the most promising?
- This season Ukraine started to actively ship wheat flour to UAE. Saudi Arabia and Oman are interested in Ukrainian flour. These countries are attractive due to price factor, however, there are several restrictions. For example, Saudi Arabia bans import of flour in bags, it imports flour in 1 kg packs. Moreover, there is strong competition with Turkey at these markets.
- What are the features and risks of trade with MENA?
- As we are a state company we need guarantees of timely payment. We supply the products solely on prepaid basis due to unstable situation in several countries of the region.
- Tell us about quality requirements existing in MENA region.
- Currently Ukrainian products fully meet existing quality requirements. Sometimes there are questions regarding moisture content. Required flour fortification is one of the feature.
Moreover, many buyers are interested in packed products. We are solving this issue now.
- Do you plan to widen assortment of goods exported to MENA?
- This market consumes a lot of groats. Thus we can consider export of groats to MENA, however, it is too early to predict any volumes.
- What about competitiveness of Ukraine at that market?
- We face rather strong competitiveness regarding both prices and quality. However, we have a chance to strengthen our position at this market as quality of our products is suitable.
Interviewed by Anna Tanskaya