Report Highlights:

Grain traders are wary of supplying wheat and barley to the government of Jordan, due to the rejection of shipment of 100,000 MT of Polish by Jordan's Food and Drug Administration. In MY2015/16, U.S. corn imports will attain 75,000 MT, and U.S. rice are expected at 100,000 MT, making U.S. rice the leading origin in the Jordanian market.

Executive Summary:

The Hashemite Kingdom of Jordan is among the poorest water resources countries on earth. Water scarcity is a real threat to the country's ability to grow crops. As a result, Jordan's domestic production of cereals is negligible.

In MY2015/16, Jordan's wheat consumption is forecast to reach 1.1 million metric tons (MMT), of which 100,000 MT is expected to be imported from the U.S. as part of USDA's Food for Progress Program. While barley consumption will increase by six percent to 900 MT from MY2014/15, none from the US. The key suppliers of wheat and barley will be Black Sea sources, mainly Romania, Russia, and Ukraine.

In MY 2015/16, corn imports are expected to reach 660,000 MT, with U.S. origin corn expected to supply 75,000 MT. Rice imports will amount to 200,000 MT, of which the US will be the top supplier with 100,000 MT.

Wheat

Production:

Production of wheat is negligible in Jordan, however, in MY2015/16, due to above-average rainfall, production increased by 33 percent from MY 2014/15 to 20,000 MT, providing close to three weeks of the country's annual consumption needs.

Consumption:

In FY 2015/16, Post's consumption estimate is line with USDA's forecast of 1,115 MT, unchanged from FY2014/15 estimate. The influx of Syrian refugees, which began in early 2012, has increased the annual wheat consumption by approximately 250,000 MT (30 percent). Syrian registered refugees, estimated to be 600,000 registered refugees according to the United Nations High Commissioner for Refugee. An additional 600,000 Syrians are living legally in Jordan, bringing the total estimated population close to over 8 million, and a per capita wheat consumption of 136 kg/person.

Trade:

In MY 2015/16, wheat imports are expected to increase by 3 percent to 1.2 MMT from MY2014/15. Black Sea wheat remains more competitive than other sources, especially U.S. wheat, due to its proximity to Jordan, and will remain the dominant supplier of wheat. U.S. wheat exports will account for 100 TMT, all of which will be donated under USDA's Food for Progress Program.

However, a shipment of 100,000 MT of Polish wheat was rejected in February by the Jordanian Food and Drug Administration (JFDA) under the premise that it did not meet standards for human consumption. A Jordanian court ruled that the shipment must be re-exported, leading to a bitter dispute between the supplier and local authorities. The dispute has created uncertainty among traders, who have been unwilling to participate in government tenders, with the exception of a new trader representing a Romanian company. Due to this development, Jordan's Ministry of Industry and Trade modified its requirement so that a single bidder could be allotted the tender from the required three bidders.

Stocks:

Post forecasts ending stocks at 520 MT, slightly higher than USDA's estimate of 504 MMT. The Government of Jordan (GOJ) continues its policy of maintaining strategic stocks at 10 months of consumption to avoid any shortages. These are equivalent to 600,000 MT stored in silos and 200,000 on vessels at sea and at port. The GoJ has a project to expand local silo capacity by an extra 225 thousand MT in addition to the 100 TMT that has been tendered out, alleviating the tight storage capacity that affects all commodities.

Policy:

Jordan's wheat bread, known as "unified bread" (in Arabic as mowahad), is fully subsidized by the government and all consumers are entitled to it. The GOJ sets the price of subsidized wheat flour, so that bakeries are able to sell bread at US$ 0.22 per kg. To do so, the GOJ provides the bakeries with wheat flour extracted at a milling rate of 80 percent at US$50 per MT, while the market cost for the wheat flour can attain a price of up to US$300 per MT. Whenever there is an increase in the cost of an input used for making bread, such as fuel, the GOJ lowers the flour price to compensate for that increase. There are no indications that the GOJ has plans to change its bread subsidy policy.

Marketing:

The Ministry of Industry and Trade (MIT) is the sole wheat importer in Jordan, selling its wheat to the mills, these add the cost of milling. The mills subsequently sell the wheat to the bakers under MIT's supervision. MIT subtracts the cost of subsidy from the subsidized flour upon invoicing the mills.

Wheat

2013/2014

2014/2015

2015/2016

Market Begin Year

Jul 2013

Jul 2014

Jul 2015

Jordan

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

21

0

15

15

15

20

Beginning Stocks

447

447

398

339

454

520

Production

29

15

20

20

25

25

MY Imports

839

850

1161

1188

1150

1200

TY Imports

839

850

1161

1188

1150

1200

TY Imp. from U.S.

0

50

0

0

0

100

Total Supply

1315

1312

1579

1547

1629

1745

MY Exports

2

8

10

10

10

110

TY Exports

2

8

10

10

10

110

Feed and Residual

15

15

115

17

15

15

FSI Consumption

900

950

1000

1000

1100

1100

Total Consumption

915

965

1115

1017

1115

1115

Ending Stocks

398

339

454

520

504

520

Total Distribution

1315

1312

1579

1547

1629

1745

(1000 HA) ,(1000 MT)

Barley

Production:

Production of barley is negligible. Most barley is used for animal feed at its early growth stages.

Consumption:

In MY2015/16, Post expects barley consumption to increase by six percent to 900 MT from MY2014/15, and 50 MT greater than USDA's estimate of 850 MT. Most of the barley is used for sheep feed and to a lesser extent in dairy cattle and poultry rations. Although barley use has dropped significantly after the GOJ adopted the animal tag system, this year it's on the rise as Jordanian herders are increasing their sheep rearing capabilities, due to attractive prices for its meat in the Gulf Region. Each sheepherder receives subsidized barley according to the actual number of tagged animals up to 10 heads of sheep per herder, farmers split the family owned herd amongst family members to capitalize the subsidy.

Trade:

In MY 2015/16, total imports are expected to be 950,000 MT, 150,000 MT greater than USDA's estimate of 800,000. The increase is a result of a greater consumption and discrepancies in FY2014/15 trade numbers. Barley suppliers are mainly Black Sea countries, with Russia being the top supplier, followed by Romania, and Ukraine. No barley imports from the U.S. have been recorded for a decade.

The GOJ is the main importer of barley and sets the selling price, which is usually an average of different origins and delivery dates, plus storage and handling costs, minus the subsidized discount which is usually in the order of $10-50. The system allows for arbitrage when significant price swings occur, as traders can quickly take advantage and make a profit by offering a lower price than the government's set price, effectively undercutting it.

Stocks:

In MY 2015/16, Post expects tighter ending stocks of 320,000 MT, much lower than USDA's forecast of 492,000 MT due to an increase in consumption and discrepancies in trade numbers. This amount is less than the GOJ's policy of having strategic stocks that meet 10 months of consumption needs, however, Post does not foresee that the GOJ will increase its purchases to make up for the deficit.

Policy:

Only sheep and goat owners receive subsidized barley in the form of a discounted price. This program excludes cattle and poultry farmers from receiving subsidized barley as these two agricultural subsectors are considered industries. The GOJ animal tagging project has created a reliable database on all ruminant animals in Jordan, replacing the questioned animal census.

Marketing:

The Ministry of Industry and Trade (MIT) is the predominant barley importer in Jordan. MIT solicits bids through traders that meet the stipulated standards. Once it purchases the barley, MIT distributes and sells the barley at the subsidized prize to herders on the basis of the number of tagged animals that are recorded in the database up to 10 heads per herder.

Barley

2013/2014

2014/2015

2015/2016

Market Begin Year

Jul 2013

Jul 2014

Jul 2015

Jordan

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

38

30

20

30

25

25

Beginning Stocks

362

362

462

450

527

245

Production

41

18

15

25

15

25

MY Imports

1009

920

900

620

800

950

TY Imports

997

920

900

620

800

950

TY Imp. from U.S.

0

0

0

0

0

0

Total Supply

1412

1300

1377

1095

1342

1220

MY Exports

0

0

0

0

0

0

TY Exports

0

0

0

0

0

0

Feed and Residual

950

850

850

850

850

900

FSI Consumption

0

0

0

0

0

0

Total Consumption

950

850

850

850

850

900

Ending Stocks

462

450

527

245

492

320

Total Distribution

1412

1300

1377

1095

1342

1220

(1000 HA) ,(1000 MT)

Corn

Production:

Jordan's corn production is negligible, with annual production totaling less than 10,000 MT. Corn that is domestically produced is used for human consumption as corn on the cob.

Consumption:

In MY 2015/16, corn consumption is forecast at 660,000 MT, in line with USDA's estimate, an increase of 4 percent from MY2014/15's 625,000 MT. The growth in consumption will be driven by the dairy industry, as it expands operations capitalizing on the shortfall of supply from Syria. Jordan's poultry industry is considered the biggest agri-business sector in Jordan, with an investment value of around $ 2.5 billion, however, it will not grow as aggressively as the dairy sector, yet it will consume 70 percent of the imported corn.

Trade:

In MY2015/16, corn imports are expected to increase by 4 percent to 675,000 MT, in line with USDA's forecast. The increase is also in proportion to the increase in consumption. Post expects that imports of U.S. corn will be in the order of 75,000 MT, however, traders have complained of the low quality of U.S. corn, which makes it less attractive than corn from other origins.

In MY 2014/15, the decrease in U.S. corn prices provided a respite for U.S. origin corn, but the market is still dominated by Argentina and Brazil, supplying 77 percent of all imports, and the US the third largest supplier with 6 percent of the market share. The Jordan-U.S. Free Trade Agreement no longer provides an advantage for U.S. corn, as all imported corn is exempt from tariffs. Additionally, Argentinian and Brazilian importers are more versatile, accommodating shipments of 10,000-15,000 MT that the market requires.

Stocks:

Only a nominal amount of corn is stored on-farm by poultry farmers to meet their monthly needs, as no adequate storage system has been developed in Jordan, which is why traders prefer to source small shipments of 10-15,000 MT.

Policy:

There are no restrictions on corn trade in Jordan, and specifications for corn are similar to U.S. standards. Issues that have arisen in the past are excessive broken kernels, no consignment above 7.5 percent is allowed to enter the country, and corn that exceeds the established maximum residue limits for aflatoxins, which are equivalent to USFDA standards.

Marketing:

Corn in Jordan is imported and distributed through private sector traders, which is usually unloaded directly to trucks that deliver it immediately to the dairy and poultry farms.

Corn

2013/2014

2014/2015

2015/2016

Market Begin Year

Oct 2013

Oct 2014

May 2016

Jordan

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

1

1

1

1

1

1

Beginning Stocks

36

36

61

24

56

50

Production

10

10

5

10

5

10

MY Imports

675

564

650

675

675

675

TY Imports

675

564

650

675

675

675

TY Imp. from U.S.

0

16

0

40

0

75

Total Supply

721

610

716

709

736

735

MY Exports

25

26

25

24

25

30

TY Exports

25

26

25

24

25

30

Feed and Residual

625

550

625

625

650

650

FSI Consumption

10

10

10

10

10

10

Total Consumption

635

560

635

635

660

660

Ending Stocks

61

24

56

50

51

45

Total Distribution

721

610

716

709

736

735

(1000 HA) ,(1000 MT)

Rice, Milled

Production:

Being one of the driest countries in the world, Jordan does not produce rice at all due to crops high water demands.

Consumption:

MY2015/16 consumption is line with USDA's forecast of 200,000 MT. Rice is a staple of the Jordanian diet widely used in one of their traditional dishes called "mansef", with an average annual consumption of about 24 kg per person. The preferred variety is medium grain (camolino), which constitutes 90 percent of imports. The consumption of rice usually goes up during parliamentary elections; contestants tend to hand out big feasts of mansef to lure their constituents.

Trade:

In MY 2015/15, imports are expected to reach 200,000 MT in line with USDA's estimate. U.S. market share for rice is expected to remain steady at nearly 50 percent, close to 100,000 MT of U.S. rice imports. Other major rice suppliers include the EU, Thailand, India and Australia.

Stocks:

Minimal stocks are maintained for this commodity.

Policy:

There are no restrictions on rice trade in Jordan, and specifications are similar to U.S. standards.

Marketing:

Rice in Jordan is imported and distributed through private sector traders that package and provide a continuous supply to retailers as soon as it is discharged from the vessels.

Rice, Milled

2013/2014

2014/2015

2015/2016

Market Begin Year

Jan 2014

Jan 2015

Jan 2016

Jordan

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Harvested

0

0

0

0

0

0

Beginning Stocks

10

10

11

11

11

12

Milled Production

0

0

0

0

0

0

Rough Production

0

0

0

0

0

0

Milling Rate (.9999)

0

0

0

0

0

0

MY Imports

151

151

200

196

200

200

TY Imports

151

151

200

196

200

200

TY Imp. from U.S.

88

88

0

96

0

100

Total Supply

161

161

211

207

211

212

MY Exports

0

0

0

5

0

1

TY Exports

0

0

0

5

0

1

Consumption and Residual

150

150

200

190

200

200

Ending Stocks

11

11

11

12

11

11

Total Distribution

161

161

211

207

211

212

(1000 HA) ,(1000 MT)