session 4 b maurice saade
TRANSCRIPT
THE GRAIN CHAIN
Authors: Julian Lampietti, Michelle Battat, Arnold de Hartog,
Dana Erekat, Sean Michaels, Donald Larson
Food Security &
Managing Wheat Imports in Arab Countries
Presented by Maurice Saade, Sr. Agriculture Economist, The World Bank
Beirut, February 6, 2012
As a region, Arab countries are the most dependent on
imported grain
2
Net Exports of Grain (Trillion Calories), by Region, 2010
+24
-204
+56
Arab
Countries
(56%) Rest of Africa
(13%)
Oceania
Asia
(6%)
Former
Soviet Union
Central and South
America
North America
Europe +318
+60
-228
-62
+58
+
-
Net Exporter
Net Importer
Dependency
Ratio (%)
Source: Authors.
Context
The 3 main pillars for improving food security in Arab countries.
3
Note: Data based on a model that generated illustrative projections for Arab countries (including Sudan)
Source: Adapted from IFPRI, 2008
Volu
me o
f G
rain
s (M
illion M
T)
1. Address Demand
2. Enhance Supply
3. Manage Exposure to Import
Risks
Wheat Import Supply Chain (WISC): The analysis covers the supply chain from the unloading port to bulk storage at the
flour mill
4
BENCHMARKING EXERCISE:
•10 Arab countries (Bahrain, Egypt, Jordan, Lebanon, Morocco, Oman, Qatar, Saudi,
Tunisia, Yemen)
•2 benchmarks (Netherlands & South Korea)
•Objective is to…
• identify bottlenecks and provide recommendations for improvement
• identify opportunities for regional cooperation
• identify regional best practices (lessons learned from neighbors, or benchmarks)
Some Arab countries import wheat from a diverse range
of sources, while others do not
5
2009 Wheat Imports by Origin for Selected Corridors
0%
20%
40%
60%
80%
100%
EU-27 Black Sea Americas Australia Other
Share
of
Whea
t im
port
s by O
rigin
Notes: Wheat imports from Turkey are grouped in the Black Sea category.
Source: Authors.
Benchmarking
6
Average 2009 WISC Costs (Total: $40/mt)
29% ($12)
12% ($5)
22% ($9)
36% ($15)
Port Logistics
Storage
Transport to Inland Silos & Mills
WISC Management
Source: Authors.
Note: Costs are weighted averages for the ten participating Arab countries. Percentages may not add to 100 and values may not add to totals due to rounding.
Logistics efficiency was measured using two metrics: cost
and time
Benchmarking
WISC Costs in Arab countries in 2009 were up to four
times that of the Netherlands
7
10
8
5 5
3
1 1
3 3 2 2
1
3
3
5
3
2
3 4
1 0
0 1
0
0
2
4
6
8
10
12
14
Unloading Time Waiting Time
8
Source: Authors.
Vess
el W
aitin
g a
nd U
nlo
adin
g T
imes
(Indexed t
o the N
eth
erl
ands)
Benchmark Country
Bottlenecks at the port can significantly increase WISC
costs and transit times
Benchmarking
9
Source: Authors. AgWeb. http://www.agweb.com/what-a-day/, accessed October 4, 2011.
0% 0% 0% 0% 2%
6% 7% 10%
12%
21%
42%
51%
0%
10%
20%
30%
40%
50%
60%
Perc
ent
of
WIS
C C
ost
s
2009 Inland Transport Costs as a Share of Total WISC Costs
Efficient and reliable inland transportation is critical to
ensuring delivery of wheat
Benchmarking
Key messages 10
Arab countries are highly dependent on cereal imports, particularly wheat, and are vulnerable to high and volatile international prices.
Supply disruptions can threaten national security, suggesting that supply chains must be efficient and reliable.
Investments in wheat-import supply chains are critical to reducing Arab countries exposure to import price and supply risks.
Arab countries import ~40 MMT/year & $40/mt is $1.6 BN per year
Saving 10% of supply chain costs can help increase strategic reserves by one month
Strategic reserves can mitigate import risks for Arab countries. Increasing strategic reserves involves key tradeoffs that must be addressed when making policy decisions.
Improving the performance of the Wheat-Import Supply Chain is critical for food security in Arab Countries and needs to be an integral part in any food security strategy, in addition to enhancing domestic supplies and a better management of demand.